1. SWOT Analysis ! S W O T

2. SWOT Analysis Learning Objectives What is SWOT Analysis?
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise for SWOT Analysis
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3. SWOT Analysis What is SWOT Analysis? Strengths Oppurtunity Weakness
Acronym for Strengths, Weaknesses, Opportunities, and Threats.
Strengths
Technique is credited to Albert Humphrey who led a research project at Stanford University in the 1960s and 1970s.
SWOT
Analysis
Planning tool used to understand Strengths, Weaknesses, Opportunities, & Threats involved in a project / business.
Oppurtunity
Weakness
Used as framework for organizing and using data and information gained from situation analysis of internal and external environment.
Technique that enables a group / individual to move from everyday problems / traditional strategies to a fresh perspective.
Threats

4. What is SWOT Analysis? STRENGTHS
Characteristics of the business or a team that give it an advantage over others in the industry.
Positive tangible and intangible attributes, internal to an organization.
Beneficial aspects of the organization or the capabilities of an organization, which includes human competencies, process capabilities, financial resources, products and services, customer goodwill and brand loyalty.
Examples - Abundant financial resources, Well-known brand name, Economies of scale, Lower costs [raw materials or processes], Superior management talent, Better marketing skills, Good distribution skills, Committed employees.

5. What is SWOT Analysis? WEAKNESSES
Characteristics that place the firm at a disadvantage relative to others.
Detract the organization from its ability to attain the core goal and influence its growth.
Weaknesses are the factors which do not meet the standards we feel they should meet. However, weaknesses are controllable. They must be minimized and eliminated.
Examples - Limited financial resources, Weak spending on R & D, Very narrow product line, Limited distribution, Higher costs, Out-of-date products / technology, Weak market image, Poor marketing skills, Limited management skills, Under-trained employees.

6. What is SWOT Analysis? OPPORTUNITIES
Chances to make greater profits in the environment - External attractive factors that represent the reason for an organization to exist & develop.
Arise when an organization can take benefit of conditions in its environment to plan and execute strategies that enable it to become more profitable.
Organization should be careful and recognize the opportunities and grasp them whenever they arise. Opportunities may arise from market, competition, industry/government and technology.
Examples - Rapid market growth, Rival firms are complacent, Changing customer needs/tastes, New uses for product discovered, Economic boom, Government deregulation, Sales decline for a substitute product .

7. ! ! What is SWOT Analysis? SWOT ANALYSIS - THREAT THREATS
External elements in the environment that could cause trouble for the business - External factors, beyond an organization’s control, which could place the organization’s mission or operation at risk. !
Arise when conditions in external environment jeopardize the reliability and profitability of the organization’s business.
Compound the vulnerability when they relate to the weaknesses. Threats are uncontrollable. When a threat comes, the stability and survival can be at stake. !
Examples - Entry of foreign competitors, Introduction of new substitute products, Product life cycle in decline, Changing customer needs/tastes, Rival firms adopt new strategies, Increased government regulation, Economic downturn.

8. SWOT Analysis Learning Objectives What is SWOT Analysis?
Aim of SWOT Analysis
Aim of SWOT Analysis?
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
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9. W S T O Aim of SWOT Analysis?
HARMFUL
HELPFUL
To help decision makers share and compare ideas.
To bring a clearer common purpose and understanding of factors for success. S W
To organize the important factors linked to success and failure in the business world.
To analyze issues that have led to failure in the past. T O
To provide linearity to the decision making process allowing complex ideas to be presented systematically.

10. SWOT Analysis Learning Objectives What is SWOT Analysis?
Aim of SWOT Analysis
Who needs SWOT Analysis?
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
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11. Who needs SWOT Analysis?
When the team has not met its targets
Customer service can be better
Launching a new business unit to pursue a new business
New team leader is appointed 2
Business Unit
Job Holder
Company
When supervisor has issues with work output
Assigned to a new job
New financial year – fresh targets
Job holder seeks to improve performance on the job
When revenue, cost & expense targets are not being achieved
Market share is declining
Industry conditions are unfavorable
Launching a new business venture 1 3

12. Who needs SWOT Analysis?
SWOT Analysis is also required for / during...
Changing Jobs
Product Launch
Decision Making
Personal Development Planning
Competitor Evaluation
Product Evaluation
Strategic Planning
Brainstorming Meetings
Workshop Sessions

13. SWOT Analysis Learning Objectives What is SWOT Analysis?
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
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14. 1. Analyse Internal & External Environment
How to conduct SWOT Analysis?
3. Prepare Action Plans
2. Perform SWOT Analysis
& Document
1. Analyse Internal & External Environment

15. How to conduct SWOT Analysis?
1. Analyse Internal & External Environment

16. How to conduct SWOT Analysis?

17. 7 6 5 4 3 2 1 How to conduct SWOT Analysis?
2. Perform SWOT Analysis & Document
Carry your findings forward - Make sure that the SWOT analysis is used in subsequent planning. Revisit your findings at suitable time intervals. 6 5
Evaluate listed ideas against Objectives - With the lists compiled, sort and group facts and ideas in relation to the objectives. 4
List Strengths, Weaknesses, Opportunities, & threats 3
Create a workshop environment - Encourage an atmosphere conducive to the free flow of information. 2
Select contributors - Expert opinion may be required for SWOT
Allocate research & information gathering tasks - Background preparation can be carried out in two stages – Exploratory and Detailed. Information on Strengths & Weaknesses should focus on the internal factors & information on Opportunities & Threats should focus on the external factors. 1
Establish the objectives - Purpose of conducting a SWOT may be wide / narrow, general / specific.

18. How to conduct SWOT Analysis?
3. Prepare Action Plan
Once the SWOT analysis has been completed, mark each point with:
Things that MUST be addressed immediately
Things that can be handled now
Things that should be researched further
Things that should be planned for the future

19. SWOT Analysis Learning Objectives What is SWOT Analysis
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
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20. Benefits of SWOT Analysis
Benefits & Pitfalls of SWOT Analysis
Benefits of SWOT Analysis
Benefits of SWOT Analysis
Forecasting
Provides a variety of information critical to forecasted variables. Threats, for e.g., can impact a business's forecast. By understanding the company's advantages & disadvantages, forecasts will be more accurate.
Knowing the Competion
Reviews a company's competitors & benchmarks against them to configure strategies that will put the company in a competitive advantage.
Decision Making Tool
Provides well-rounded information that prompt
well-informed decisions.

21. Benefits & Pitfalls of SWOT Analysis
Benefits of SWOT Analysis
Besides the broad benefits, here are few more benefits of conducting SWOT Analysis:
Helps in setting of objectives for strategic planning
Provides a framework for identifying & analyzing strengths, weaknesses, opportunities & threats
Provides an impetus to analyze a situation & develop suitable strategies and tactics
Basis for assessing core capabilities & competencies
Evidence for, and cultural key to, change
Provides a stimulus to participation in a group experience

22. Benefits & Pitfalls of SWOT Analysis
Can be very subjective. Two people rarely come up with the same final version of a SWOT. Use it as a guide and not as a prescription.
May cause organizations to view circumstances as very simple due to which certain key strategic contact may be overlooked.
Categorizing aspects as strengths, weaknesses, opportunities & threats might be very subjective as there is great degree of uncertainty in market.
To be effective, SWOT needs to be conducted regularly. The pace of change makes it difficult to anticipate developments.
The data used in the analysis may be based on assumptions that subsequently prove to be unfounded [good and bad].
It lacks detailed structure, so key elements may get missed.

23. SWOT Analysis Learning Objectives What is SWOT Analysis?
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
Tips & Exercise
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24. Tips & Exercise TIPS Do’s Don’ts Be analytical and specific.
Record all thoughts and ideas.
Be selective in the final evaluation.
Choose the right people for the exercise.
Choose a suitable SWOT leader or facilitator.
Think out of the box
Be open to change
Don’ts
Try to disguise weaknesses.
Merely list errors and mistakes.
Lose sight of external influences and trends.
Allow the SWOT to become a blame-laying exercise.
Ignore the outcomes at later stages of the planning process.

25. Be willing to breakaway from traditional methods.
Tips & Exercise
TIPS
Introduce the SWOT method and its purpose in your organization to gain acceptance.
When conducting a SWOT analysis, designate a leader or group facilitator.
Be willing to breakaway from traditional methods.
While doing a SWOT analysis for your job, invite someone to brainstorm with you.
Discuss and record the results. Prepare a written summary of the SWOT analysis to give to participants.

26. Tips & Exercise
EXERCISE
Assume that a car manufacturing company has recently launched its products. Perform a SWOT analysis for the same.

27. * Hypothetical figures
Tips & Exercise
EXERCISE
Helpful
STRENGTHS
WEAKNESSES
No Competition in the EV Segment.
Environment friendly
Economic to Drive [Rs per km] *
Government subsidies [8% excise duty] *
High Price
Low aesthetic appeal
Small driving range [up to KM]
Competition from gasoline vehicles
Internal
OPPORTUNITIES
THREATS
Huge untapped EV market
Growing demand of green technologies
Rising fuel costs
Growing road congestion in urban cities
Government incentives to gasoline vehicles
Entry of competitors
Stringent safety requirements anticipated
Availability of hybrid vehicles
External
* Hypothetical figures
Harmful

28. Mc Donald’s SWOT Analysis
Tips & Exercise
EXAMPLE
Mc Donald’s SWOT Analysis

29. Tips & Exercise Mc Donald’s SWOT Analysis
INTERNAL
Ranks very high on the Fortune Magazine's most admired list
Community oriented
Global operations all over the world
Cultural diversity in the foods
Excellent location
Assembly line operations.
Use of top quality products
STRENGTHS
WEAKNESSES
Failing pizza test market thus limiting the ability to compete with pizza providers.
High training costs due to high turnover.
Minimal concentration on organic foods.
Not much variation in seasonal products .
Quality concerns due to franchised operations.
Focus on burgers / fried foods not on healthier options for their customers.
Opening more joint ventures.
Being more responsive to healthier options.
Advertising wifi services in the branches.
Expanding on the advertising on being more socially responsible
Expansions of business into newly developed parts of the world.
Open products up to allergen free options such as peanut free.
OPPORTUNITIES
Marketing strategies that entice people from small children to adults.
Lawsuits for offering unhealthy foods.
Contamination risks that include the threat of e-coli containments.
The vast amount of fast food restaurants that are open as competition.
Focus on healthier dieting by consumers.
Down turn in economy affecting the ability to eat
that much.
THREATS
EXTERNAL

30. LEVEL STRATEGIES Business-level Strategy Corporate-level Strategy
An integrated and coordinated set of commitments and actions the firm uses to gain competitive advantage by exploiting core competencies in specific product markets
Corporate-level Strategy
Specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets
Expected to help firm earn above-average returns
Value ultimately determined by degree to which “the businesses in the portfolio are worth more under the management of the company then they would be under any other ownership”

31. Corporate Level Strategies
Corporate-level strategy concerns:
The scope of the markets and industries the firm competes in
How the firm manages their portfolio of businesses
Mode of entry into new businesses
Internal development, acquisitions/merger, joint venture/strategic alliance
Level and type of diversification
Capturing synergies between business units
Allocating corporate resources
Product diversification is the primary form of corporate-level strategy
Diversification is often looked at as a growth strategy

32. Corporate, Competitive & Functional Strategies
Corporate strategy establishes the overall direction that the organization hopes to go.
Competitive & functional strategies provide the means or mechanisms for making sure the organization gets there.

33. Possible Corporate Strategic Directions
(1) Moving the organization ahead -- Organizational Growth
(2) Keeping the organization where it is -- Organizational Stability
(3) Reversing the organization’s weaknesses or decline -- Organizational Renewal

34. ORGANIZATIONAL GROWTH
Growth strategy
Involves the attainment of specific growth objectives by increasing the level of an firm’s operations
Typical growth objectives for businesses
Increase in sales revenues
Increase in earnings or profits
Other performance measures
Growth objectives of not-for-profit businesses
Increasing clients served or patrons attracted
Broadening the geographic area
Increasing programs offered

35. Concentration Strategy
Market Development Option
When a firm sell its current products in new markets (additional geographic areas or market segments not currently served by firm)
Product-Market Diversification Option
Where firm seeks to expand both into new products & new markets
Single-business firm becomes a multiple-business firm since it is now operating in a different industry

36. Concentration Strategy
Advantage
Organization becomes very good at what it does
Drawback
Organization is vulnerable to industry and other external environmental shifts
Concentration strategy is used by both small-sized and large organizations

37. Diversification Strategies
A corporate growth strategy in which a firm expands its operation by moving into a different industry
Many reasons or motives for diversification
Two major types of diversification
Related (concentric) diversification
Unrelated (conglomerate) diversification

38. Why Do Firms Diversify? To Grow
Increase sales & profitability beyond what firm’s core businesses can provide
Managerial self-serving behavior -- compensation
Managerial “hubris” -- pride or status that come from managing a large business
To more fully utilize existing resources and capabilities
Skills in sales & marketing, general management skills & knowledge, distribution channels, etc.

39. Why Do Firms Diversify? Risk reduction and/or spreading
Escape from unattractive or undesirable industries (e.g., tobacco & oil companies)
Stability of profit flows (CAPM: systematic vs. unsystematic risks; shareholders & diversified portfolios)
To make use of surplus cash flows
Large cash balances attract corporate raiders
Use cash balances to avoid hostile takeovers
To build shareholder value
Create synergy among the businesses of a firm
Make = 5: The whole should be greater than the sum of the parts

40. Why Do Firms Diversify Synergy can be obtained in three ways
Exploiting economies of scale
Exploiting economies of scope
Efficient allocation of capital through the use of portfolio management techniques
Problems that prevent diversified firms from realizing synergies
A poor understanding of how diversification activities will “fit” or be coordinated with existing businesses
Dangers or risks associated with the acquisition of businesses
Problems with the development of internal businesses