IT Entrepreneurial Work Term Presentation SWOT Analysis IT Entrepreneurial Work Term Presentation

What is it used for? A SWOT analysis is a tool used to: Evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business venture (either existing or proposed) A SWOT analysis can be carried out for a product, place, industry or person Involves “sizing up” the environment by identifying the internal and external factors that are favorable and unfavorable to the business, competition or industry as a whole Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category to make the analysis useful and find competitive advantage Some research is required

Strengths-Internal Influences Characteristics of the business, idea project or industry that give it an advantage over others. The business typically has control over these strengths What is the business “known for”? Questions to consider: What strengths does it have? What strengths does the competition have? Why do these strengths exist? Why does the competition have these strengths?

Weaknesses-Internal Influences Characteristics that place the business, project or industry at a disadvantage relative to others. Questions to consider: What weaknesses exist? What weaknesses does the competition have? Why do these weaknesses exist? Why does the competition have these weaknesses?

Opportunities-External Influences Elements that the business, project or industry could exploit to its advantage. Questions to consider: What opportunities exist? How can these opportunities be taken advantage of? What opportunities does the competition have? Are they taking advantage of these opportunities? If so, how? What can be done to benefit from their opportunities?

Threats-External Influences Elements in the environment that could cause trouble for the business, project or industry. Questions to consider: What are the competition’s strengths that may be a negative impact? What strengths may hurt the competition? How can these threats be turned into opportunities? Is the competition doing anything to turn their threats into opportunities?

SWOT Analysis Example Demonstration-McDonald’s Corporation

SWOT Analysis-McDonald’s Corporation Company Background Revenues of $27.56 Billion (2012) Profits of $5.46 Billion (2012) Number of Employees (2013): 1,800,000

Strengths (Helpful) Largest fast food market share in the world Close to 25,000 locations worldwide 80% of restaurants owned by independent franchisees Brand name recognition Valued at $40 Billion (2013) Significant competitive advantage Marketing Annual $2 Billion advertising budget Strategic partnerships with other large corporations (Disney, Pixar, NHL)

Weaknesses (Harmful) Declining Sales and Stock prices Unhealthy Menu Severely impacted by economic impacts (recessions) Impacted by currency flucuations Unhealthy Menu Goes against current trends Obesity concerns (eg. Supersize Me Documentary) Mac job/high employee turnover Negative publicity Minimum wage positions

Opportunities (Helpful) Increasing demand for healthy food Changing customer habits Breakfast market Huge potential in coffee market; highest growth market in fast food industry Specialty coffee offerings (cappuccinos, lattes etc.) High end burgers Gourmet, customized burger offerings Niche market Bargain hunters Implement bargain menu Coupon discounts

Threats (Harmful) Competition Coffee Outlets Saturated fast food markets in developing economies (eg. Burger King, Wendy’s) Local fast food/quick service restaurant chains impact (eg. Tim Hortons) Coffee Outlets Starbucks, Tim’s, local breakfast establishments Established customer loyalty Healthier fast food alternatives Subway, Wendy’s (salad menus) Healthy eating/active lifestyle promotions Trans fat/calorie awareness campaigns

SWOT Analysis-McDonald’s Corporation (Summary) Strengths Weaknesses Market share (Global Influence) Brand Name Recognition Advertising Budget Declining Sales and Stock Prices Unhealthy Menu Mac job perception

SWOT Analysis-McDonald’s (Summary) Opportunities Threats Demand for healthy menu options Breakfast/Coffee market growth Gourmet Selections (high end burgers) Bargain Hunters Competition (saturated) Existing and Established Coffee Outlets Healthier Fast Food Alternatives

Conclusion The SWOT analysis has beneficial and practical applications. It can: Help organizations decide whether or not an objective is reachable Assists organizations to set achievable goals, objectives, and steps needed to take to implement changes to the business Identify gaps in the market and either take advantage of them or re-evaluate the company’s position based on identified or emerging trends It enables business owners/entrepreneurs an overview of what is working well for their competitors or what can be done better than the competition Offers a map of the company’s position in the market place (locally, regionally, globally), industry etc.