SWOT

Analysis

S W O T

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
SWOT Analysis

Learning Objectives
What
What is
is SWOT Analysis?
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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 What is SWOT Analysis?

Acronym for Strengths,

Strengths Weaknesses, Opportunities, and
Threats.
Technique is credited to Stanford
University in the 1960s and
1970s.

Planning tool used to understand

Oppurtunity
SWOT Weakness
Strengths, Weaknesses,
Opportunities, & Threats involved

Analysis in a project / business.

Used as framework for
organizing and using data and
information gained from
situation analysis of internal and
external environment.
Technique that enables a group /
Threats individual to move from everyday
problems / traditional strategies
to a fresh perspective.

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
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.

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
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 .

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
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.

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
 What
SWOT is- SWOT
ANALYSIS THREAT Analysis?

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.

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
SWOT Analysis

Learning Objectives
What is SWOT Analysis?

Aimof
Aim of SWOT
SWOT Analysis
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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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.
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.
To provide linearity to
the decision making
process allowing
complex ideas to be
presented systematically.

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
Take Excellent Notes!

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SWOT Analysis

Learning Objectives
What is SWOT Analysis?

Aim of SWOT Analysis

Whoneeds
Who needsSWOT
SWOTAnalysis?
Analysis?

How to conduct SWOT Analysis?

Benefits & Pitfalls of SWOT Analysis

Brainstorming & Prioritization in SWOT Analysis

Tips & Exercise

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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

Management Company
• When supervisor has issues with
work output • When revenue, cost & expense
targets are not being achieved
1 • Assigned to a new job
• 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

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
 Who needs SWOT Analysis?
SWOT Analysis is also
required for / during...
Effectiveness in Market
Product Launch

Decision Making

Personal Development Planning

Competitor Evaluation

Product Evaluation
Strategic Planning

Brainstorming Meetings

Goods & Services Evaluation

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
SWOT Analysis
Learning Objectives
What is SWOT Analysis?

Aim of SWOT Analysis

Who needs SWOT Analysis?

How to
How to conduct
conduct SWOT
SWOT Analysis?
Analysis?

Benefits & Pitfalls of SWOT Analysis

Brainstorming & Prioritization in SWOT Analysis

Tips & Exercise

Example text
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How to conduct SWOT Analysis?

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

External Environment & Document

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
How to conduct SWOT Analysis?

1. Analyse Internal & External Environment

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
How to conduct SWOT Analysis?

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
How to conduct SWOT Analysis?

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

External Environment & Document

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
 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, & threats
Create a workshop environment -
Encourage an atmosphere conducive
to the free flow of information.

Select contributors - Allocate research & information gathering tasks -

Expert opinion may be Background preparation can be carried out in two
required for SWOT stages – Exploratory and Detailed. Information on
Strengths & Weaknesses should focus on the
internal factors & information on Opportunities &
Threats should focus on the external factors.
Establish the objectives - Purpose of
Mr.conducting
Sherpinsky'saHonors
SWOTMarketing
may be wide
Class. / narrow,
general / specific.
2015 All rights reserved.
How to conduct SWOT Analysis?

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

External Environment & Document

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
Take Notes!

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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

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
SWOT Analysis

Learning Objectives
What is SWOT Analysis

Aim of SWOT Analysis

Who needs SWOT Analysis?

How to conduct SWOT Analysis?

Benefits &
Benefits & Pitfalls
Pitfalls of
of SWOT
SWOT Analysis
Analysis

Brainstorming & Prioritization in SWOT Analysis

Tips & Exercise

Example text
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 Benefits & Pitfalls of SWOT Analysis

Benefits of SWOT Analysis

Benefits of
SWOT
Analysis

Knowing the Competion Forecasting

Reviews a company's competitors Provides a variety of information
& benchmarks against them to critical to forecasted variables.
configure strategies that will put Threats, for e.g., can impact a
the company in a competitive Decision Making Tool business's forecast. By
advantage. understanding the company's
Provides well-rounded
advantages & disadvantages,
information that prompt
forecasts will be more accurate.
well-informed decisions.

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
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

Mr. Sherpinsky's Honors Marketing Class.
2015 All rights reserved.
Benefits & Pitfalls of SWOT Analysis
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.

Mr. Sherpinsky's Honors Marketing Class.
2015 All rights reserved.
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

Example text
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Brainstorming & Prioritization in SWOT Analysis

Brainstorming Prioritization

Output from Brainstorming exercise is Prioritized

Begin brainstorming by asking the At the end of the Brainstorming exercise:

following questions: • Reduce the list of strengths & weaknesses to no
• What opportunities exist in our more than five distinctive competencies and
external environment? debilitating weaknesses
• What threats to the institution exist in • Strengths that are distinctive competencies
our external environment? • Weaknesses that are debilitating
• What are the strengths of our • Reduce threats and opportunities to the five most
institution? critically important of each.
• What are the weaknesses of our
institution?

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
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

Example text
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 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 evaluation. х Lose sight of external influences and trends.
 Choose the right people for the exercise. х Allow the SWOT to become a blame-laying
 Choose a suitable SWOT leader or exercise.
facilitator. х Ignore the outcomes at later stages of the
 Think out of the box planning process.
 Be open to change

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
Bring it all together!

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Tips & Exercise
TIPS

Introduce the
SWOT method
and its purpose Be willing to
When in your breakaway from
conducting a organization to traditional
SWOT analysis, gain acceptance. methods.
designate a
leader or group
facilitator.

Discuss and record

the results. Prepare
While doing a a written summary
SWOT analysis of the SWOT analysis
for your job, to give to
invite someone participants.
to brainstorm
with you.
Mr. Sherpinsky's Honors Marketing Class.
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Tips & Exercise
EXERCISE

Assume that a car manufacturing company has recently

launched its products. Perform a SWOT analysis for the
same.

Mr. Sherpinsky's Honors Marketing Class.

2015 All rights reserved.
Tips & Exercise
EXERCISE
Helpful

STRENGTHS WEAKNESSES
• No Competition in the EV • High Price
Segment. • Low aesthetic appeal

Internal
• Environment friendly • Small driving range [up to
• Economic to Drive [Rs. 0.4 80 KM]
per km] * • Competition from gasoline
• Government subsidies [8%
vehicles
excise duty] *
OPPORTUNITIES THREATS

• Huge untapped EV market • Government incentives

External

• Growing demand of green to gasoline vehicles

• Entry of competitors
technologies • Stringent safety
• Rising fuel costs requirements anticipated
• Growing road congestion • Availability of hybrid vehicles
in urban cities

* Hypothetical Mr. Sherpinsky's Honors Marketing Class.

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Tips & Exercise
EXAMPLE

Mc Donald’s SWOT Analysis

Mr. Sherpinsky's Honors Marketing Class.

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Tips & Exercise
Mc Donald’s
SWOT Analysis INTERNAL

STRENGTHS WEAKNESSES

• Ranks very high on the Fortune Magazine's most • Failing pizza test market thus limiting the
admired list ability to compete with pizza providers.
• Community oriented • High training costs due to high turnover.
• Global operations all over the world • Minimal concentration on organic foods.
• Cultural diversity in the foods • Not much variation in seasonal products .
• Excellent location • Quality concerns due to franchised operations.
• Assembly line operations. • Focus on burgers / fried foods not on healthier
• Use of top quality products options for their customers.

OPPORTUNITIES THREATS
• Opening more joint ventures. • Marketing strategies that entice people from
• Being more responsive to healthier options. small children to adults.
• Advertising wifi services in the branches. • Lawsuits for offering unhealthy foods.
• Expanding on the advertising on being • Contamination risks that include the threat of
more socially responsible e-coli containments.
• Expansions of business into newly developed • The vast amount of fast food restaurants that
parts of the world.
• Open products up to are open as competition.
allergen free options • Focus on healthier dieting by consumers.
such as peanut free. • Down turn in economy affecting the ability to eat
EXTERNAL
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Tips & Exercise
Points to Ponder

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Ready for Exam?

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