Strategic Management

5- SWOT analysis

By: Ahmed El-Tagy

a_tagy@hotmail.com
www.eltagy.com

© Ahmed El-Tagy, RITI-Cairo 2011

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 Session 4- Internal Analysis and SWOT analysis

• Agenda:
• SWOT analysis
• TOWS
• Porter Generic Strategies

© Ahmed El-Tagy, RITI-Cairo 2011

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The strategic Formulation
Strategy

A
Tactics
Goal
Goal B
VISION
Strategic Choice:
Situation Analysis: 1.SWOT Analysis.
1.Environmental 2.Porter Generic
Analysis strategies.
(PESTL Analysis) analysis.
2.Porter 5 Forces Feasibility Setting Implementation
3.Ansoff Matrix.
3.Internal Analysis. Check Goals and Control
4.CSF decisions.
4.Critical success 5.BCG Matrix.
Factors (CSF)
5.Value chain
© Ahmed El-Tagy, RITI-Cairo 2011
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 Strategy Plan
External Analysis Internal Analysis

Macro analysis SWOT Corporate Strategies

(PESTL) Access to Finance
Task environment Marketing
Process skills
(Five forces) Core competencies
TOWS

STRATEGIC CHOICE

Differentiation & Positioning (4P’s)

Implementation & Control

© Ahmed El-Tagy, RITI-Cairo 2011

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SWOT analysis
• Internal
• Strengths
• Weaknesses
• External
• Opportunities
• Threats – risks

© Ahmed El-Tagy, RITI-Cairo 2011

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SWOT Analysis
• Strength • A resource, a skill or other advantage
relative to competitors & needs of
market
• Limitation or deficiency in resource or
• Weakness skill

• Major favorable situation

• Opportunity
• Major unfavorable situation
• Threat

© Ahmed El-Tagy, RITI-Cairo 2011

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SWOT Analysis

© Ahmed El-Tagy, RITI-Cairo 2011

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 SWOT Analysis
Internal Strengths (S) Weaknesses (W)
Factors
External List 5 - 10 List 5 - 10
Factors strengths here weaknesses here
Opportunities (O)
List 5 - 10
opportunities here

Threats (T)
List 5 - 10
threats here
© Ahmed El-Tagy, RITI-Cairo 2011
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 TOWS Analysis
Internal Strengths (S) Weaknesses (W)
Factors
External 5 - 10 5 - 10
Factors strengths weaknesses
Opportunities (O) SO Strategies WO Strategies
5 - 10 Use strengths to Take advantage of
opportunities take advantage of opportunities by
opportunities overcoming weaknesses
Threats (T) ST Strategies WT Strategies
5 - 10 Use strengths to Minimize weaknesses
threats avoid threats and avoid threats
© Ahmed El-Tagy, RITI-Cairo 2011
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 SWOT Analysis

• Strength and weakness are internal and we can control.

• If you can influence  it is internal
• Opportunities and threats are external we can not control, but
only impact laws, technology, and competitor.

• For the internal , we get info. From:

 customers feedbacks
 employees not from you.
Capabilities.
Resources.
Processes.
© Ahmed El-Tagy, RITI-Cairo 2011
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SWOT Analysis
• Opportunities & threats:
• Customer feedback.
• Environment.
• Industry.
• Competitive data.

© Ahmed El-Tagy, RITI-Cairo 2011

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Internal and external exercise
• Which of these are Internal(S or W) and which are External (O or T).
• Currency devaluation.
• Decline market share.
• Low price of my goods.
• Good access to finance.
• Increase in consumer demand.
• New technology.
• Increase the number of product rejects.
• High product quality.
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• bad level of customer support.
• Need more sales people.
• Limited budget.
• Direct delivery capability.
• Local competitors have poor products.

© Ahmed El-Tagy, RITI-Cairo 2011

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 SWOT Analysis
• Items are listed in separate short points.
• Best to be preformed in Brainstorming sessions.
• “Dialectics”. { + & -} { Male & Female}
• There were philosophers in ancient times who believed
that the disclosure of contradictions in thought and the
clash of opposite opinions was the best method of arriving
at the truth.
• Karl Marx.

© Ahmed El-Tagy, RITI-Cairo 2011

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 SWOT Analysis
• "Development is the 'struggle' of opposites." (Lenin, Vol.
XIII, p. 301.)
• You don’t do the idea first, but you do the analysis and the
idea come from the analysis.
• The talent is in the “Moderator” how to manage the session
to be constructive.

© Ahmed El-Tagy, RITI-Cairo 2011

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SWOT Analysis
• We get a list of Ideas that then put in the form of Goals statements.
• Goals should be SMART
• How to get the ideas:
• TOWS
• The big tip is: make sure that you inform the SWOT, i.e. getting the
data right.
• Make sure to develop SMART goals.

© Ahmed El-Tagy, RITI-Cairo 2011

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 SWOT example
STRENGTHS
1. Current profit ratio increased
2. Employee morale high
3. Market share has increased
WEAKNESSES
1. Legal suits not resolved
2. Plant capacity has fallen
3. Lack of strategic management
system

OPPORTUNITIES Opportunity-Strength (OS) Opportunity-Weakness (OW)

1. Western European unification Strategies Strategies
2. Rising health consciousness in Acquire food company in Europe Develop new Pepperidge Farm
selecting foods (S1, S3, O1) products (W1, O2, O3)
3. Demand for soups increasing Develop new healthy soups (S2,
annually O2)

THREATS Threat-Strength (TS) Strategies Threat-Weakness (TW) Strategies

1. Low value of dollar Develop new biodegradable soup Close unprofitable European
2. Tin cans are not biodegradable containers (S1, T2) operations (W3, T1)

© Ahmed El-Tagy, RITI-Cairo 2011

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SWOT for Whirlpool

© Ahmed El-Tagy, RITI-Cairo 2011

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Wal-Mart
Strengths Weaknesses
1. Customer oriented 1. No formal mission statement
2. SAM’s Club consumers able 2. Membership only for SAM’S Club
to buy in bulk 3. Keep poor performing employees on
3. Supercenters offer one stop hand
shopping 4. Old fashioned store policies
4. Satisfaction guaranteed 5. Few women and minorities in top
programs promoting management
customer goodwill
5. Buy from local merchants
when possible
6. Stock ownership and profit-
sharing with employees
7. Leads industry in
information technology
8. Ongoing development of its
employees
9. Strong community
involvement

© Ahmed El-Tagy, RITI-Cairo 2011

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Opportunities S-O Strategies W-O Strategies
1. Consumers wan ease of shopping 1. Advertise more for 1. Improve
2. Internet shopping growing shopping on-line (S8, employment
3. Dollar value increasing O2) techniques to hire
4. Similar shopping patterns worldwide and keep the best
5. Retail sales expected to increase 2. Expand performing
6. Environment conscious consumers internationally employees (W3,
7. Elderly population growing because of similar W5, O6)
8. Asian Market virtually untapped by shopping patterns
retail (S3, O4, O8)
9. European Market untapped by retail

Threats S-T Strategies W-T Strategies

1. Regulation of Wal-Mart pharmacies 1. Buy from local 1. Allow consumers to
2. Small towns do not want entry of Wal- merchants to promote buy in smaller bulk
Mart unity in the without having
3. Bad media exposure for Kathie Lee community (S5, T4) membership to SAM’S
Brand Club (W2, T5)
4. Variety of competition nationally, 2. Build more
regionally and locally Supercenters for the
5. Substitute products more easily because increased demand for
of intense competition one stop shopping
(S3, T4)

© Ahmed El-Tagy, RITI-Cairo 2011

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Using SWOT in Marketing Strategy
• Be more concentrated on specific customer needs.
• Be more focused on specific products and markets.
• Use tools to help viewing opportunities (O) and strengths (S) in the
market and the company.

© Ahmed El-Tagy, RITI-Cairo 2011

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Case study: Skoda
• Please read the case and answer the questions at it’s end.

© Ahmed El-Tagy, RITI-Cairo 2011

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Thank You