Dr. Rowina M.

Twano, RECE
Associate Professor IV 1
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Why SWOT Analysis Is Important

 SWOT Analysis is an important planning

tool that helps an institution identify, in
a systematic and organized way, its
internal strengths and helps it match
those strengths with the best
opportunities in the environment.

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Why SWOT Analysis Is Important
 It is one of the “cornerstone” analytical tool
to help the organization develop a preferred
future. To respond effectively to changes in
environment, to examine the internal and
external contexts to develop a vision and a
strategy that links the two.
 When analyzed together, the SWOT
framework can paint a larger picture of where
you are and how to get to the next step.

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The Strategic Management Process

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 What are the organization’s Strengths,
Weaknesses, Opportunities and Threats ?

 S W O T represents: S W
 Strengths
 Weaknesses
 Opportunities O T
 Threats
 For an organization’s strategy to be well-
conceived, it must be matched to both
 Taking advantage of its internal strengths
while defending against its weaknesses
 Identifying the best market opportunities and
minimizing external threats to its well-being
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 How do you use your SWOT
analysis?
Use it to:
• Identify the issues or problems you intend to
change.
• Set or reaffirm goals.
• Create an action plan.

Copyright © 2014 by The University of Kansas

 Identifying Resource Strengths
and Competitive Capabilities
 A strength is something a firm does well or a characteristic
that enhances its competitiveness. Examining these areas
helps you understand what’s already working. You can then
use the techniques that you know work
 Valuable competencies or know-how
 Valuable physical assets
 Valuable human assets
 Valuable organizational assets
 Valuable intangible assets- e.g. “Image”
 Important competitive capabilities
 An attribute that places an organization in a position of
competitive advantage
 What does our target audience like about our organization?
 Alliances with capable partners

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Identifying Resource Strengths
and Competitive Capabilities

Resource strengths and

competitive capabilities
are competitive assets !

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 Identifying Resource Weaknesses
and Competitive Deficiencies
 A weakness is something a firm lacks, does poorly,
or a condition placing it at a disadvantage
 Resource weaknesses relate to
 Deficiencies in know-how or expertise or
competencies
 Lack of important physical, organizational, or
intangible assets
 Missing capabilities in key areas
Resource weaknesses and deficiencies are
competitive liabilities !

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 Identifying Resource Weaknesses
and Competitive Deficiencies

 Identify the company’s weaknesses by asking:

 Which initiatives are underperforming and why?
 What can be improved?
 What resources could improve our performance?
 How do we rank against our competitors?

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SWOT Analysis: What to Look For
Potential Resource Strengths
• Powerful strategy
• Strong financial condition
• Strong brand name
image/reputation
• Widely recognized as market
leader
• Proprietary technology
• Cost advantages
• Strong communications
• Product innovation
• Good customer service
• Better product quality
• Alliances or JVs
American University of Beirut
Potential Resource Weaknesses
• No clear strategic direction
• Obsolete facilities
• Weak balance sheet; excess
debt
• Higher overall costs than
rivals
• Missing some key
skills/competencies
• Internal operating problems
• Falling behind in R&D
• Too narrow product line
• Weak marketing and
communications skills
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SWOT Analysis:
Potential Resource Strengths Potential Resource Weaknesses

• Strong financial • Weak

condition accountability
• Strong brand name/ • Higher overall
reputation
costs than
• Widely recognized as competition
market leader
• Better “product”
quality
• Accreditations
• Campus and facilities
American University of Beirut 14
SWOT Analysis:
Opportunities
Opportunities and
threats are external—
things that are going on
outside your company, in
the larger market. You
can take advantage of
opportunities and protect
against threats, but you
can't change them.
American University of Beirut
Threats
Here are a few questions to
ask yourself to identify
external threats:
What changes in the
industry are cause for
concern?
What new market trends are
on the horizon?
Where are our competitors
outperforming us?
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SWOT Analysis: What to Look For
(Cont.)
Potential Opportunities
• Serving additional “customer”
groups
• Expanding to new geographic
areas
• Expanding product line
• Transferring skills to new
products or services
• Vertical integration
• Take market share from rivals
• Alliances or acquisitions
• Openings to exploit new
technologies
• Openings to extend brand
name/image
American University of Beirut
Potential External Threats
• Entry of potent new
competitors
•Substitute products or
services
• Slowing market growth
• Adverse shifts in political or
economic conditions
• Costly new regulations
• Growing leverage of
customers or suppliers
• Reduced buyer needs for
product or services
• Demographic changes
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SWOT Analysis:
Potential Opportunities Potential External Threats

• Expanding • Entry of new

“customer” base competitors
• Expanding product • Strengthening of
line (New schools, existing competitors
new programs) • Substitute products
• Alliances and or services (e-
accreditations Learning)
• Exploiting new • Economic &
technologies Political situation in
the country
American University of Beirut 17
Tools for Strategy Formulation
SWOT ANALYSIS

Internal Strengths Weaknesses

External Opportunities Threats

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 Tools for Strategy Formulation

Strengths (S) Weaknesses (W)

Opportunities (O) SO Strategies WO Strategies

Threats (T) ST Strategies WT Strategies

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 Tools for Strategy Formulation
 SO Strategies: Use strengths to take advantage of
opportunities
 WO Strategies: Overcome weaknesses to take
advantage of opportunities
 ST Strategies: Use strengths to avoid threats
 WT Strategies: Minimize weaknesses and avoid
threats

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 Strengths
• We are able to respond quickly
to customers.
• Our staff are young and
enthusiastic.
• Our leader has a good
reputation in the community.
Opportunities
• Our business sector is
expanding.
• Our local council wants to
encourage local businesses by
giving them contracts.
• The government is considering
offering tax exemptions to small
companies like ours.
Weaknesses
• Our company is new and has
not developed a strong reputation
yet.
• Our staff don’t have a lot of
experience.
• We are not making a lot of
money yet.
Threats
• Technology may change this
market beyond our ability to
adapt.
• If a larger, more established
competitor starts offering the
same services, we may not have
any business.
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