How do we go through SWOT analysis?

…WE SIMPLY LIST DOWN THE

STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS

AND THEN…WHAT?

In the first place, do we identify the SWOTs correctly?

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 Definition of a SWOT Analysis

A process generates information that is helpful in

matching an organization or group’s goals,
programs, and capacities to the business
environment in which it operates. Note that in
itself is only a data capture – the analysis follows.

Developed between 1960-1970

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 The SWOT analysis approach provides a good
framework for reviewing strategy, position and
direction of a company, product, project or person
(career).

If properly done…
SWOT ANALYSIS
CAN BE A VERY
EFFECTIVE BASIS
FOR FORMULATING
THE RIGHT BUSINESS
STRATEGIES! 4
 Aim of a SWOT Analysis

Reveal, realize and understand your competitive

advantages and how to make use of them to
pursue business opportunities
Analyze your prospects for sales, profitability and
product development
Prepare your company for problems
Allow for the development of contingency plans
Be able to grow faster and sustain the
momentum by consistently scanning the
business environment for opportunities

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 Simple rules for a successful SWOT analysis

1. Be realistic about the strengths and weaknesses of your

organization
2. The Analysis should distinguish between where your
organization is today, and where it could be in the future.
3. Be specific. Avoid grey areas
4. Always analyze in relation to your competition i.e. better than
or worse than your competition
5. Keep your SWOT analysis short and simple – but only as short
and simple as the application or situation demands – it is about
‘fitness for purpose’
6. Avoid unnecessary complexity and over (SWOT) analysis
7. There is no point listing an opportunity (O) if the same
opportunity is available to competitors
8. It is pointless to say you have strengths (S) if your competitors
have the same

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 WHAT ARE SWOTs
Strengths
•Positive tangible and intangible attributes, internal to an organization.
•They are within the organization’s control.

Weakness
•Factors that are within an organization’s control that detract from its ability to attain
the desired goal.
•Which areas might the organization improve?

Opportunities
•External attractive factors that represent the reason for an organization to exist
and develop.
•What opportunities exist in the environment, which will propel the organization?
Identify them by their “time frames”

Threats
•External factors, beyond an organization’s control, which could place the
organization mission or operation at risk.
•The organization may benefit by having contingency plans to address them if they
should occur.
•Classify them by their “seriousness” and “probability of occurrence”.
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Overview SWOT Matrix:

SWOT Analysis POSITIVE/ HELPFULto NEGATIVE/ HARMFUL/

achieving the goal RISKSto achieving the goal

INTERNAL Origin
facts/ factors of the
organization Strengths Weaknesses
Things that are good now, Things that are bad now,
maintain them, build on remedy, change or stop
them and use as leverage them.

EXTERNAL Origin
facts/ factors of the
environment in which the Opportunities Threats
organization operates Things that are good for the Things that are bad for the
future, prioritize them, future, put in plans to
capture them, build on them manage them or counter
and optimize them ©rapidbi.com

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Suggestion: Don’t make it SWOT but instead OTSW

Growth comes from opportunities.

Capabilities and resources are nothing without
opportunities

GROWTH OPPORTUNITIES ARE ADDITIONAL

REVENUES/PROFITS THAT ARE UNREALIZED
BECAUSE:
1. We are not aware of them
2. We do not act on them
3. We do not address and overcome the issues/impediments
to pursue them
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What is business opportunity basically?

Unserved or underserved
Market need or demand

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1. List the key external opportunities.
2. List the key external threats.
3. List the key internal strengths.
4. List the key internal weaknesses.
5. Match the internal strengths with external opportunities and
record in the resultant S-O Strategies cell.
6. Match the internal weaknesses with external opportunities and
record in the resultant W-O Strategies cell.
7. Match internal strengths with external threats and record in the
resultant S-T Strategies cell.
8. Match internal weaknesses with external threats and record in the
resultant W-T Strategies cell.
9. Integrate and Assess the Strategies
10. Select the Right Strategies
REMINDER: It is important to include the “O#, S#” type notations after each
recommended strategy. These notations reveal the rationale for each of the
alternative strategies.
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TIPS in constructing a SWOT Analysis
1) O-T are external factors
 PEST, Trends; Regulations; Competition
2) S-W are internal vs. competitors
 organization/people
 product/price/promotion/placement
3) Be specific and data based. Quantify and validate
everything. Honest assessment.
5) Use only external factors that have significant impact to
your particular business

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 Opportunities Threats

• Market Growth • Market Decline

• Favorable trends • Unfavorable trends
• Passive competition • Active competition
• Absence of entry • Numerous entry
barriers barriers
• Emerging market • Maturing market
• Open Market • Regulated market

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Strengths Vs. Competitors Weaknesses Vs. Competitors
 Product  Product
 Positioning  Positioning
 Price  Price
 Promotion  Promotion
 Placement  Placement
 Production  Production
 People  People (Organization/HR)
 Processes  Processes
 Peso (Resources)  Peso (Resources)

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 Positive
Internal Factors STRENGTHS
• Strong Customer Relation
• Brand Equity
• Product Superiority
• Competitive Cost
• Production Expertise
• Distribution Reach
• Experienced Management
• More Resources
External Factors OPPORTUNITIES
•Growing market
•Market liberalization
•New market trends
•New/Emerging market
•New distribution channels
•Weakening competition
•Need for new/extra services
Negative
WEAKNESSES
• Weak Customer Base
• Weak/Struggling Brand
• Unreliable Product/Service
• High Product Cost
• Unreliable Production
• Poor Access To Distribution
• Slow Management DM
• Less Resources
THREATS
•Declining market
•Closing liberalization
•New market trends
•Market Saturation
•Limited distribution channels
•Emerging or growing
competition
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S-O STRATEGIES
How will you harness maximize your strengths to take advantage of
the opportunities

S-T STRATEGIES
How will you capitalize on your strengths to neutralize the threats

W-O STRATEGIES
How will you overcome your weaknesses to take advantage of
opportunities
W-T STRATEGIES
How will you minimize your weaknesses to lessen the impact of market
threats
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 OPPORTUNITIES THREATS
SWOT Analysis
Strategy Matrix

STRENGTHS O-S Strategies T-S Strategies

WEAKNESSES O-W Strategies T-W Strategies

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 OPPORTUNITIES THREATS
SWOT Analysis O1 T1
O2 T2
Strategy Matrix O3 T3
O4 T4

STRENGTHS O-S Strategies T-S Strategies

S1 O1-S3 T1-S2
S2
S3
O2-S1 T3-S1
S4 O1,2,4 – S4

WEAKNESSES O-W Strategies T-W Strategies

W1 O1-W3 T1-W2
W2
W3
O4-W4 T2-W4
W4

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1. SWOT Analysis
2. Strategic Options
3. Refer to Corporate
Objectives/Management Direction
4. Consider Company Resources and
Competencies
5. Evaluate Risk Level
6. Select the Most Workable and Efficient
Strategies
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 Rating 1-5

Alignment Capability
Strategic W/ Corporate and Availability Risk
Options Direction Competency of Resources Level
1

Strategies above 3 will be pursued

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 Market Penetration
 Market Development

 New Product Development

 Diversification
Ansoff's Product/Market Matrix
 Increasethe market share of an
existing product in an existing market
- Introduce new product usage for
existing customers
- Increase product consumption or
frequency of use by existing customers
 Increase sales of an existing product by
developing new market segments:
- Geographical expansion
- Product Extension (flanking brand by
pack size)
- New Distribution Channels (institutional)
- Different pricing policies
 Introduction of a new product under
the same category into an existing
market (brand extension, i.e., Colgate
Toothpaste)
 Introduction of a new product under
a different category into an existing
market (i.e., ______?)
 Develop and introduce entirely new
products into new markets
 Risky since the business is moving
into markets that it has or little
experience