SWOT

ANALYSIS
BUSINESS & ENTREPRENEURSHIP
STIKES MITRA BUNDA PERSADA
What Is SWOT Analysis

 A technique that enables a group or individual to

move from everyday problems and traditional
strategies to fresh prospective.
 SWOT analysis looks at your strengths and
weaknesses, and the opportunities and threats
your business faces.
 SWOT Analysis

 The SWOT analysis framework is very important

and useful tool to use in marketing Management
and other business applications.
 As a basic tools its mastery is a fundamental
requirement for marketer, entrepreneur or
business person.
 A clear understanding of SWOT is required for
business majors.
What Is SWOT Analysis
 Technique is credited to
Albert Humphrey who led a
research project at Stanford
Strenghts Weakness University in the 1960s and
1970s.
 Planning tool used to
understand Strenghts,
SWOT Weakness, Opportunity and
Analysis Threat involved in a project /
business
 Used as framework for
organizing and using data
Opportunity Threats and information gained from
situation analysis of internal
and external enviroment
SWOT is an acronym for :

Internal External
Enviroment Enviroment

S- O-
Strengths Opportunities

W - Weakness T - Threats
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, 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.
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.
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..

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 .
What is SWOT Analysis?

THREATS

External elements in the

environment that could cause
trouble for the business - External
factors, beyond an organization’s
!
control.
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.
 To help decision
makers share and
compare ideas.
To bring a clearer
common purpose
S W and
understanding of
factors for
success
To organize
. the
important factors
linked to success
and failure in the
business world.

O T To provide
linearity to the
decision making
process allowing
complex ideas to
be presented
systematically.
Who needs SWOT Analysis?

• When the team has not met its

targets
2 • Customer service can be better
• Launching a new business unit to
pursue a new business
• New team leader is appointed

Business Unit

Job Holder Company

• When supervisor has issues with
work output • When revenue, cost & expense
• Assigned to a new job targets are not being achieved
1 • New financial year – fresh targets 3 • Market share is declining
• Job holder seeks to improve • Industry conditions are unfavorable
performance on the job • Launching a new business venture
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
How to conduct SWOT Analysis?

1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action Plans

External Environment & Document
How to conduct SWOT Analysis?

1. Analyse Internal & External Environment

.
How to conduct SWOT Analysis?

1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action Plans

External Environment & Document
 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.

Evaluate listed ideas against

Objectives - With the lists compiled,
sort and group facts and ideas in
relation to the objectives. List Strengths,
Weaknesses,
Opportunities, &
Create a workshop
threats
environment - Encourage an
atmosphere conducive to the
free flow of information. Allocate research & information gathering
tasks - Background preparation can be
Select contributors - carried out in two stages – Exploratory and
Expert opinion may be Detailed. Information on Strengths &
required for SWOT Weaknesses should focus on the internal
factors.
Establish the objectives - Purpose of
conducting a SWOT may be wide /
narrow, general / specific.
How to conduct SWOT Analysis?

1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action Plans

External Environment & Document
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

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.

 Tips & Exercise

TIPS

.
Do’s Don’ts
 Be analytical and specific. х Try to disguise weaknesses.
 Record all thoughts and ideas. х Merely list errors and mistakes.
 Be selective in the final х Lose sight of external influences and
evaluation. trends.
 Choose the right people for the х Allow the SWOT to become a blame-
exercise. laying
 Choose a suitable SWOT leader exercise.
or facilitator. х Ignore the outcomes at later stages of
 Think out of the box the
 Be open to change planning process.