8What is SWOT Analysis?

Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis is a strategy

development tool that matches internal organizational strengths and weaknesses with
external opportunities and threats.
Steve Jobs' 12 Rules of Success  
4. Make SWOT analysis. As soon as you join/start a
company, make a list of strengths and weaknesses of yourself and your
company on a piece of paper... More
A Balanced Perspective
SWOT analysis helps you balance idealism and pragmatism, and obtain a balanced
perspective of your internal strengths and weaknesses and external opportunities and threats to
develop an effective strategy.
Why SWOT Analysis?
SWOT Analysis is the Key Component of Strategic Development. It can prompt
actions and responses.
Successful businesses build on their strengths, correct their weaknesses and
protect against internal vulnerabilities and external threats. They also keep an
eye on their overall business environment and spot and exploit new opportunities
faster than competitors. SWOT analysis is a tool that helps many businesses in this
process.
SWOT analysis is based on the assumption that if managers can carefully review such
strengths, weaknesses, opportunities, and threats, a useful strategy for ensuring organizational
success will become evident to them.
Strengths
Two factors contribute to your strengths: ability and resources available.
Ability is evaluated on 3 counts:
1. Versatility: your ability to adapt to an ever changing environment.
2.Growth: your ability to maintain a continuing growth.
3. Markets: your ability to penetrate or create new markets.
The strength of resources has three dimensions:
1.Availability: your ability to obtain the resources needed.
2.Quality: the quality and up-to-dateness of the resources employed.
3. Allocation: your ability to distribute resources both effectively and efficiently.
Weaknesses
Your weaknesses are determined through failures, defeats, losses and inability to match up
with the dynamic situation and rapid change. The weaknesses may be rooted in  lack of
managerial skills, insufficient quality, technological backwardness, inadequate systems or
processes, slow deliveries, or shortage of resources. There are three possible outcomes to the
analysis of your weaknesses.1
 1.Correction of an identified defect.
2.Protection through cover-up and prevention strategies to reduce the exposure of
your weaknesses.
3. Aggression to divert the attention from your  
weaknesses.
Opportunities
Opportunities are abundant. You must develop a formula which will help you define what
comes within the ambit of an opportunity to focus on those areas and pursue those
opportunities where effectiveness is possible. The formula must define product/service, target
market, capabilities required and resources to be employed, returns expected and the level of
risk allowed.
Weaknesses of your competitions are also opportunities for you. You can exploit them in two
following ways:
1. Marketing warfare: attacking the weak leader's position and focusing all your
efforts at that point, or making a surprise move into an uncontested area.
2. Collaboration: you can use your complementary strengths to establish a
strategic alliance with your competitor.
Threats
External threats arise from political, economic, social, technological (PEST) forces.
Technological developments may make your offerings obsolete. Market changes may result
from the changes in the customer needs, competitors' moves, or demographic shifts. The
political situation determines government policy and taxation structure.
SWOT Analysis: Questions To Answer
 What is your strongest business asset?
 What do you offer that makes you stand out from the rest?
 Do you have any specific marketing expertise?... More
The Art of War: Strengths and Weaknesses
Excerpts from the The Art of War, Sun Tzu
 When you form your strategy, know the strengths and weaknesses of your plan.
 Carefully compare the opposing army with your own, so that you may know
where strength is superabundant and where it is deficient... More
Swot Analysis Of Pepsi Co.

Strength
• Pepsi has a broader product line and outstanding reputation.
• Merger of Quaker Oats produced synergy across the board.
• Record revenues and increasing market share.
• Lack of capital constraints (availability of large free cash flow).
o Great brands, strong distribution, innovative capabilities
o Number one maker of snacks, such as corn chips and potato chips
• PepsiCo sells three products through the same distribution channel.
For example, combining the production capabilities of Pepsi, Gatorade and Tropicana is a big
opportunity to reduce costs, improve efficiency and smooth out the impact of seasonal
fluctuations in demand for particular product.

Weakness
• Pepsi hard to inspire vision and direction for large global company.
• Not all PepsiCo products bear the company name
• PepsiCo is far away from leader Coca-cola in the international market - demand is highly
elastic.

Opportunity
• Food division should expand internationally
• Noncarbonated drinks are the fastest-growing part of the industry
• There are increasing trend toward healthy foods
• Focus on most important customer trend - "Convenience".

Threats
• F&B industry is mature
• Pepsi is blamed for pesticide residues in their products in one of their most promising
emerging market e.g in India
• Over 50 percent of the company's sales come from Frito-Lay; this is a threat if the market
takes a downturn
• PepsiCo now competes with Cadbury Schweppes, Coca-Cola, and Kraft foods (because of
broader product line) which are well-run and financially sound competitors.
• Size of company will demand a varied marketing program; Social, cultural, economic,
political and governmental constrains.

Strategies
The purpose of the strategy is to increase the EPS by 15% per annum and increase PepsiCo's
stock price. There are two ways to increase the EPS, first is to increase the income and second to
decrease the amount of stocks outstanding. To increase the income, there are...