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SWOT Analysis
Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
Introduction
• SWOT analysis technique was found by Albert Humphrey who led a research
project at Stanford University in the 1960s and 1970s.
• He used the data from Fortune 500 companies to identify why corporate
planning failed.
• His research identified a number of key areas that were critical to corporate
planning and the tool used to explore each of the critical areas was called SOFT
analysis.
• Albert Humphrey and the original research team used the following categories:
“What is good in the present is Satisfactory, good in the future is an
Opportunity; bad in the present is a Fault and bad in the future is a Threat.”
S W
O T
What is SWOT Analysis?
S W Strengths are:
T
Weaknesses
S W Weaknesses are:
S W Opportunities are:
• Chances to make greater profits in the
environment.
• External attractive factors that
O T represent the reason for an
organization to exist and develop.
• Condition of the environment that
benefits the organization in planning
and executing strategies that enable it
to become more profitable.
T
Threats
S W Threats are:
• External elements in the environment
that could cause trouble for the
business.
O T • External factors, beyond an
organization’s control, which could
! place the organization’s mission or
operation at risk.
• Conditions in external environment
that jeopardize the reliability and
profitability of the organization’s
business.
Threats compound the vulnerability when
they relate to the weaknesses. Threats are
uncontrollable. When a threat comes, the
stability and survival can be at stake.
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T
MCQ
Click on the
radio button
to select the
correct
answer!
MCQ
O Opportunities
(based on
Threats
(based on T
analysis of): analysis of):
• General Environment • General Environment
• Industry Environment • Industry Environment
• Main Competitors • Main Competitors
Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
Who needs SWOT Analysis?
SWOT Analysis is useful for various aspects from the perspective of the following:
Job Holder:
Company:
• The opportunities
and threats
presented by the
external environment
Let us look at each in detail. to the organization.
Internal Factors
•
The internal factors may be viewed as strengths or
weaknesses depending upon their impact on the
organization's objectives.
•
The external factors are out of the organization’s control,
such as political and economic factors, technology,
competition, and other areas.
Quadrant 1 —internal
strengths matched with
external opportunities
Strengths and Opportunities
Quadrant 2 — internal
weaknesses relative to
external opportunities
Strengths and Threats
Quadrant 3 —internal
strengths matched with
external threats
Weaknesses and Opportunities
Quadrant 4 —internal
weaknesses relative to
external threats
Weaknesses and Threats
Apply - take
Activate – identify
Aim – is the action
the strengths or
Goal or measures of
Assess – is the
objective success & use
SWOT review
itself them to
advantage
MCQ
Click on the
radio button
to select the
correct
answer!
MCQ
A TOWS analysis involves the same basic process of listing strengths, weaknesses,
opportunities and threats as a SWOT analysis. However, in a TOWS analysis, threats
and opportunities are examined first and weaknesses and strengths are examined
last. After creating a list of threats, opportunistic, weaknesses and strengths,
managers examine ways the company can take advantage of opportunities and
minimize threats by exploiting strengths and overcoming weaknesses.
Thus, you can see that both SWOT and TOWS analysis involve the same basic steps
and so may likely produce similar results. However, the order in which managers
think about strengths, weaknesses, threats and opportunities may make a different
impact on the direction of the analysis. This is because focusing on threats and
opportunities first helps lead to productive discussions about what is going on in
the external environment. So, you do not just start by concentrating on abstract
discussions about what a company is good at or bad at.
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A TOWS analysis involves the same basic process of listing strengths, weaknesses,
opportunities and threats as a SWOT analysis. However, in a TOWS analysis, threats
and opportunities are examined first and weaknesses and strengths are examined
last. After creating a list of threats, opportunistic, weaknesses and strengths,
managers examine ways the company can take advantage of opportunities and
minimize threats by exploiting strengths and overcoming weaknesses.
Thus, you can see that both SWOT and TOWS analysis involve the same basic steps
and so may likely produce similar results. However, the order in which managers
think about strengths, weaknesses, threats and opportunities may make a different
impact on the direction of the analysis. This is because focusing on threats and
opportunities first helps lead to productive discussions about what is going on in
the external environment. So, you do not just start by concentrating on abstract
discussions about what a company is good at or bad at.
Tip
Matching and converting is one way of utilizing SWOT.
OT
consumer markets, such as China and India.
• Looking for new locations and different • Competition due to lowered manufacturing costs
store types due to outsourcing to low-cost regions
of the World
• Price competition which results in price
OPPORTUNITIES deflation in some ranges THREATS
MCQ
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radio button
to select the
correct
answer!
MCQ
1. 2.
Maxi-maxi Maxi-mini
(strengths/opportunities) (strengths/threats)
3. 4.
Mini-maxi Mini-mini
(weaknesses/opportunities) (weaknesses/threats)
1. 2.
Maxi-maxi Maxi-mini
(strengths/opportunities) (strengths/threats)
Maxi-Maxi (S/O):3. 4.
Mini-maxi Mini-mini
•(weaknesses/opportunities)
This combination shows the organization’s strengths and opportunities.
• In essence, an organization should strive to(weaknesses/threats)
maximize its strengths to
capitalize on new opportunities.
Quadrant Combinations
1. 2.
Maxi-maxi Maxi-mini
(strengths/opportunities) (strengths/threats)
Maxi-Mini (S/T):3.
3. 4.
•
Mini-maxi Mini-mini
This combination shows the organization’s strengths in consideration of
(weaknesses/opportunities)
threats, such as from competitors. (weaknesses/threats)
• In essence, an organization should strive to use its strengths to parry or
minimize threats.
Quadrant Combinations
Mini-Maxi (W/O):
1.
1. 2.
2.
Maxi-maxi
Maxi-maxi Maxi-mini
Maxi-mini
• This combination shows the organization’s weaknesses in tandem with
(strengths/opportunities)
(strengths/opportunities)
opportunities. (strengths/threats)
(strengths/threats)
• It is an exertion to conquer the organization’s weaknesses by making the
most of any new opportunities.
3. 4.
4.
Mini-maxi Mini-mini
Mini-mini
(weaknesses/opportunities) (weaknesses/threats)
(weaknesses/threats)
Quadrant Combinations
Mini-Mini (W/T):1.
2.
Maxi-maxi Maxi-mini
• This combination shows the organization’s weaknesses by comparison
(strengths/opportunities)
with the current external threats. (strengths/threats)
• This is most definitely a defensive strategy, to minimize an organization’s
internal weaknesses and avoid external threats.
3. 4.
Mini-maxi Mini-mini
(weaknesses/opportunities) (weaknesses/threats)
MCQ
Click on the
radio button
to select the
correct
answer!
MCQ
Situation
Analyze Internal & External Environment:
Analyze Internal
Analyze Internal && Analysis
External Environment
External Environment The first step of SWOT Analysis is to analyze
the situation from both internal and external
aspects. Hence, carrying out the internal
Perform SWOT Analysis analysis will help you to find the strengths
Internal External
& Document Analysis and weaknesses of your organization that
Analysis
affect the situation. On the other hand,
carrying out the external analysis will help
Prepare Action Plans you to find the opportunities and threats that
are external but will affect your organization
Weaknesses Strengthsin the situation.
Opportunities Threats
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STRENGTHS
Analyze InternalWEAKNESSES
& External Environment:
Analyze
Analyze• Internal &
Technological
Internal & skills • Lack of important skills
• Leading brands • Weak brand image
External Environment
External• Environment
Distribution channels The first•step
Poorof SWOT Analysis
distribution channels is to analyze
• Customer Loyalty/Relationships • Low customer
• Product Quality the situation from both internal and external
satisfaction/retention
• Scale aspects.• Hence,
Unreliablecarrying out the internal
product quality/service
Perform• SWOT Analysis
Management
analysis•• willSub-scale
help you to find the strengths
Poor management
& Document and weaknesses ofTHREATS your organization that
OPPORTUNITIES
affect the
•
situation. On the other hand,
Change in customer base
• Changing customer tastes
• Technological advances carrying• out the ofexternal
Closing geographicanalysis
markets will help
•
you to find Technological advances and threats that
the opportunities
Prepare• Action
ChangePlans
in Government policies
External
Harmful
Steps of SWOT Analysis
• • • •
What
What are the
opportunities exist What are the
What threats to the strengths of our
in our external weaknesses of
organization exist in organization?
environment? our organization?
our external
environment?
Brainstorming
When the brainstorming session ends, you should keep the following things in
mind and take action accordingly:
OT
• The vast amount of fast food restaurants that
• Expansions of business into newly developed open as competition
parts of the world • Down turn in economy affecting the
• Open products up to allergen free capability of consumer spending
options such as peanut free • Focus on healthier dieting by
OPPORTUNITIES consumers THREATS
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functional areas
Staying focused:
• A template for carrying out SWOT Analysis is given on the next screen.
• You should fill the quadrants of the matrix and state what you are assessing
here.
• Moreover, many listed criteria in one quadrant can apply to other quadrants
also.
• You should decide and identify and use any other criteria that are appropriate
to your situation.
SWOT Analysis Template
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Click on the
video to play it!
Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
Benefits of SWOT Analysis
6 • It is easy to use
Benefits of SWOT Analysis
STRENGTHS WEAKNESSES
• No Competition in the low-budget • Lesser features
segment. • Low aesthetic appeal
• Environment friendly • Small driving range [up to 80
• Economic to Drive [25 kmpl] * KM]
• Government subsidies [8% excise • Competition from economy
duty] * segment vehicles
• Low Price
• Small and compact size
OPPORTUNITIES THREATS
Harmful
* Hypothetical figures
Case Study
1. Conduct a SWOT
Analysis for Helium for
Helium Inc. is a leading
the launch of ‘Bling’. You
manufacturer of electronic
can assume the
products. It has decided to
prevailing market
venture into the Tablet PC
conditions for the
market by launching a new
SWOT.
Tablet PC named ‘Bling’. ‘Bling’
would be based on the Android
2. What are the various
technology that allows free
quadrant combinations
download of software from its
that Helium should use
Android market for its users.
to make this new
venture a success?
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Elements
SWOT Analysis
W – Weaknesses O – Opportunities
S – Strengths T – Threats
Elements
SWOT Analysis
Summary
Analyze Internal &
External
Environment
Perform SWOT
Steps of SWOT Analysis Analysis &
Document
SWOT Analysis
SWOT Quadrants
Quadrant 1
Quadrant 4
internal strengths
matched with internal weaknesses
external relative to external
opportunities threats
Quadrant 2 Quadrant 3
internal weaknesses internal strengths
relative to external matched with
opportunities external threats
Summary
SWOT Analysis
Job Holder
Company
Considerations for
Effective SWOT Analysis
SWOT Analysis
Glossary
Click each alphabet to learn more.
O
Glossary
Click each alphabet to learn more.
• Analysis –Analysis is an A
investigation of the component
parts of a whole and their
relations in making up the B
whole.
O
Glossary
Click each alphabet to learn more.
• Brainstorming - Brainstorming is I
a group problem-solving
technique in which members
spontaneously share ideas and O
solutions.
Glossary
Click each alphabet to learn more.
• Competitor – Competitor is a
A
business or organization offering
similar competing products as
your organization.
B
• Customer - Customer is
someone who pays for goods or
services. C
O
Glossary
Click each alphabet to learn more.
• Information - Information is a A
collection of facts from which
conclusions may be drawn.
B
• Information Technology (IT) -
Information Technology (IT) is the
branch of engineering that deals
with the use of computers and C
telecommunications to retrieve and
store and transmit information.
I
O
Glossary
Click each alphabet to learn more.
• Opportunity - Opportunity is
possibility due to a favorable A
combination of circumstances.
O
Objective