Author Topic: SWOT Analysis  (Read 4697 times)

Offline shibli

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SWOT Analysis
« on: June 21, 2010, 06:56:53 PM »
SWOT Analysis
SWOT Analysis (also known as TOWS analysis) is a powerful technique for understanding a business or organization’s Strengths and Weaknesses, and for looking at the Opportunities and Threats those have to face.
The SWOT analysis (also known as TOWS analysis) is an extremely powerful technique for understanding and decision-making for all sorts of situations in business and organizations. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis headings provide a good framework for reviewing strategy, position and direction of a company or business proposition, or any other idea. Completing a SWOT analysis is very simple, and is a good subject for workshop sessions. SWOT analysis also works well in brainstorming meetings. Use SWOT analysis for business planning, strategic planning, competitor evaluation, marketing, business and product development and research reports.

Strengths and weaknesses are internal to an organization. Opportunities and threats relate to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix Analysis Tool.

A SWOT analysis is a subjective assessment of data which is organized by the SWOT format into a logical order that helps understanding, presentation, discussion and decision-making.

Business SWOT Analysis

What makes SWOT particularly powerful is that, with a little thought, it can help us to uncover opportunities that we are well placed to take advantage of. And by understanding the weaknesses of a business, we can manage and eliminate threats that would otherwise catch the business unawares.

SWOT analysis came from the research conducted at Stanford Research Institute from 1960-1970. The background to SWOT stemmed from the need to find out why corporate planning failed. The research was funded by the fortune 500 companies to find out what could be done about this failure. The Research Team were Marion Dosher, Dr Otis Benepe, Albert Humphrey, Robert Stewart, Birger Lie
The first prototype was tested and published in 1966 based on the work done at 'Erie Technological Corp' in Erie Pa. In 1970 the prototype was brought to the UK, under the sponsorship of W H Smith & Sons plc, and completed by 1973. The operational programme was used to merge the CWS milling and baking operations with those of J W French Ltd.

The process has been used successfully ever since. By 2004, now, this system has been fully developed, and proven to cope with today's problems of setting and agreeing realistic annual objectives without depending on outside consultants or expensive staff resources.

SWOT Template
SWOT analysis can be used for all sorts of decision-making, and the SWOT template enables proactive thinking, rather than relying on habitual or instinctive reactions.

The SWOT analysis template is normally presented as a grid, comprising four sections, one for each of the SWOT headings: Strengths, Weaknesses, Opportunities, and Threats. The questions are examples, or discussion points, and obviously can be altered depending on the subject of the SWOT analysis.  Many of the SWOT questions are also talking points for other headings - use them as we find most helpful, and make up our own to suit the issue being analyzed. It is important to clearly identify the subject of a SWOT analysis, because a SWOT analysis is a perspective of one thing, be it a company, a product, a proposition, and idea, a method, or option, etc.

•   What advantages does the company have?
•   What does the company do better than anyone else?
•   What unique or lowest-cost resources does company have access to?
•   What do people in market see as the company’s strengths?  
•   What Capabilities does the company have?
•   What are the Competitive advantages?
•   What are the USP's (unique selling points)?
•   What are the Resources, Assets, and People?
•   What are the Experience, knowledge, and data?
•   What are the financial reserves, likely returns?
•   How does Marketing - reach, distribute, aware?
•   What are the Innovative aspects?
•   What are Location and geographical condition?
•   What are the Price, value, quality?
•   What are the Accreditations, qualifications, certifications?
•   What are the Processes, systems, IT, communications?
•   What are the Cultural, attitudinal, behavioral?
•   What are the Management covers, succession?  

Consider this from an internal perspective, and from the point of view of the customers and people in market. And be realistic:
In looking at strengths, company thinks about them in relation to the competitors - for example, if all competitors provide high quality products, then a high quality production process is not strength in the market, it is a necessity.

•   What could you improve?
•   What should you avoid?
•   What are people in your market likely to see as weaknesses? Disadvantages of proposition?
•   What are the Gaps in capabilities?
•   What are the Lack of competitive strength?
•   What are the Reputation, presence and reach?
•   What are the Financials?
•   What are the Own known vulnerabilities?
•   What are the Timescales, deadlines and pressures?
•   How does the Cash flow, start-up cash-drain?
•   What is the Continuity, supply chain robustness?
•   What are the Effects on core activities, distraction?
•   What are the Reliabilities of data, plan predictability?
•   What are the Morale, commitment, leadership?
•   What are the Accreditations, etc?
•   What are the Processes and systems, etc?
•   What are the Management covers, succession?
Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that the company does not see? Are the competitors doing any better than that company? It is best for the company to be realistic now, and face any unpleasant truths as soon as possible.

•   Where are the good opportunities facing you?
•   What are the interesting trends you are aware of? Market developments?
•   What are the Competitors' vulnerabilities?
•   What are the Industry or lifestyle trends?
•   What are the Technology development and innovation?
•   What are the Global influences?
•   What are the new markets, vertical, horizontal?
•   What are the Niche target markets?
•   What are the Geographical, export, import?
•   What are the New USP's?
•   What are the Tactics - surprise, major contracts, etc?
•   What are the Business and product development?
•   What are the Information and research?
•   What are the Partnerships, agencies, distribution?
•   What are the Volumes, production, and economies?
•   What are the Seasonal, weather, fashion influences?
Useful opportunities can come from such things as:
•   Changes in technology and markets on both a broad and narrow scale
•   Changes in government policy related to your field
•   Changes in social patterns, population profiles, lifestyle changes, etc.
•   Local Events
A useful approach to looking at opportunities is to look at strengths and Decides whether these open up any opportunities. Alternatively, look at weaknesses and decides whether company could open up opportunities by eliminating them.

•   What obstacles do you face?
•   What is your competition doing?
•   Are the required specifications for your job, products or services changing?
•   Is changing technology threatening your position?
•   Do you have bad debt or cash-flow problems?
•   Could any of your weaknesses seriously threaten your business?
•   What are the Political effects?
•   What are the Legislative effects?
•   What are the Environmental effects?
•   What are the IT developments?
•   What are the Competitor intentions - various?
•   What are the Market demands?
•   What are the new technologies, services, ideas?
•   What are the vital contracts and partners?
•   What are the Sustaining internal capabilities?
•   What are the Obstacles faced?
•   What are the Insurmountable weaknesses?
•   What is the Loss of key staff?
•   What are the Sustainable financial backings?
•   What is the condition Economy - home, abroad?
•   What is the Seasonality, weather effects?
Carrying out this analysis will often be illuminating - both in terms of pointing out what needs to be done, and in putting problems into perspective.

Uses of SWOT analysis
Here are some examples of what a SWOT analysis can be used to assess:
•   a company (its position in the market, commercial viability, etc)
•   a method of sales distribution
•   a product or brand
•   a business idea
•   a strategic option, such as entering a new market or launching a new product
•   a opportunity to make an acquisition
•   a potential partnership
•   changing a supplier
•   outsourcing a service, activity or resource
•   an investment opportunity
Translating SWOT issues into actions under the six categories
Albert Humphrey advocated that the six categories:
•   Product (what are we selling?)
•   Process (how are we selling it?)
•   Customer (to whom are we selling it?)
•   Distribution (how does it reach them?)
•   Finance (what are the prices, costs and investments?)
•   Administration (and how do we manage all this?)
« Last Edit: December 15, 2010, 07:14:34 PM by shibli »
Those who worship the natural elements enter darkness (Air, Water, Fire, etc.). Those who worship sambhuti sink deeper in darkness. [Yajurveda 40:9]; Sambhuti means created things, for example table, chair, idol, etc.