SWOT

Analysis

S W O T
 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

Analysis involved 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.
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.
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 .
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costs, Out-of-date products / technology,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
SWOT is- THREAT
ANALYSIS SWOT 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.
How to conduct SWOT Analysis?

1. Analyse Internal & External Environment

How to conduct SWOT Analysis?
 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
conducting a SWOT may be wide / narrow,
general / specific.
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

 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 facilitator. exercise.
✓ Think out of the box х Ignore the outcomes at later stages of the
✓ Be open to change planning process.
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.
Tips & Exercise
EXERCISE

Assume that a car manufacturing company has recently

launched its products. Perform a SWOT analysis for the
same.
Tips & Exercise
EXERCISE
Helpful

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

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

* Hypothetical figures Harmful

Tips & Exercise
EXAMPLE

Mc Donald’s SWOT Analysis

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. are open as competition.
• Open products up to • Focus on healthier dieting by consumers.
allergen free options • Down turn in economy affecting the ability to eat
such as peanut free. that much.
EXTERNAL
Tips & Exercise
Points to Ponder

• Keep your SWOT short and simple, but remember to include important details. For
example, if you think your communication skills is your strength, include specific details,
such as verbal / written communication.

• When you finish your SWOT analysis, prioritize the results by listing them in order of the
most significant factors that affect you / your business to the least.

• Get multiple perspectives on you / your business for your SWOT analysis. Ask for input
from your employees, colleagues, friends, suppliers, customers and partners.

• Apply your SWOT analysis to a specific issue, such as a goal you would like to achieve or
a problem you need to solve. You can then conduct separate SWOT analyses on individual
issues and combine them.