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Tuesday, September 28, 2010
Using a SWOT Analysis to Develop Business Growth Strategy
Developing a strategy starts with a complete evaluation of a company's situation--both internal and external. This evaluation is called a SWOT Analysis. The acronym SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The S and W refer to the company's internal environment; its own strengths and weaknesses. The O and T refer to the external environment. The company's external environment is composed of both the macro and the micro environment.
It is important for the company to analyze the entire external environment to find attractive opportunities and identify threats. The goal is to align the company's strengths to seize the opportunities and eliminating or minimizing weaknesses to overcome threats. The SWOT Analysis then serves as an input for strategy development.
Examples of a SWOT Analysis
# A SWOT analysis is a method used in business planning. It is a summary of the company's current situation. The strengths and weaknesses of a company are identified, along with the opportunities and threats in its environment. The SWOT analysis allows the current state and future potential of the company to be evaluated. If the strengths and opportunities outweigh the weaknesses and threats, the company is in a good position. SWOT analyses can also be used to build strategies for the future by considering how weaknesses can be turned into strengths, and how threats can be turned into opportunities.
Example 1
# Richard Clarke of Chartwell Financial Services Ltd. described to Business Link UK how the performance of a SWOT analysis helped his business. The company, which provides independent financial consultancy services, came under new management in 2002. Since then, the business has been systematically planning its future, with SWOT analyses playing a key role.
The new management conducted a SWOT analysis after they purchased the company. They wanted to know precisely what they were entering into. They analyzed all aspects of the business including the finances, clients, competitors, and market. Clarke indicated that the analysis helped them create their strategy for the company's future. They found ways of creating strengths and opportunities out of weaknesses and threats. They realized, for example, that the overhaul of legislature concerning pensions, which at first it appeared to be a threat, was in fact an opportunity because clients would need more advice to see them through the changes.
Clarke points out that a SWOT analysis is a snapshot of the company's current position. The analysis needs to be repeated as things change. Three SWOT analyses were conducted at Chartwell in the first year alone. They used each analysis to set their next goals, each with a specified timescale.
Example 2
# The Time 100 reports that a SWOT analysis of the car manufacturer, Skoda, found that they had an excellent and well-liked product, but they only had a small percentage of the UK market.
The analysis included surveys of Skoda customers and an assessment of its place in the market. Skoda owners were found to be satisfied with their cars, but the company had only a 1.7 percent market share. The brand was found to be perceived as outdated, although Skoda was no longer seen as producing poor copies of competitor's cars. The SWOT analysis showed that Skoda needed to build its brand in order to grow its market share. They capitalized on this opportunity by creating a new advertising campaign, focusing on the positive feedback that they had received from customers, and then launched a marketing campaign based on the happy customer experience. This campaign allowed Skoda to compete against its rivals by making itself stand out.
Example 3
# A SWOT analysis of the home furnishings chain IKEA was also described by the Times 100. The analysis highlighted IKEA's commitment to sustainability and waste reduction as a major strength. The IKEA brand and their key concept of offering good quality products at affordable prices are also key strengths. The need to keep production costs down could also be viewed as a weakness; however, the growing market for green and sustainable products was identified as an opportunity that they should capitalize on. The current state of the economy is seen as a threat to IKEA's success, but their low prices were expected to help them turn this threat into an opportunity.
Example 1
# Richard Clarke of Chartwell Financial Services Ltd. described to Business Link UK how the performance of a SWOT analysis helped his business. The company, which provides independent financial consultancy services, came under new management in 2002. Since then, the business has been systematically planning its future, with SWOT analyses playing a key role.
The new management conducted a SWOT analysis after they purchased the company. They wanted to know precisely what they were entering into. They analyzed all aspects of the business including the finances, clients, competitors, and market. Clarke indicated that the analysis helped them create their strategy for the company's future. They found ways of creating strengths and opportunities out of weaknesses and threats. They realized, for example, that the overhaul of legislature concerning pensions, which at first it appeared to be a threat, was in fact an opportunity because clients would need more advice to see them through the changes.
Clarke points out that a SWOT analysis is a snapshot of the company's current position. The analysis needs to be repeated as things change. Three SWOT analyses were conducted at Chartwell in the first year alone. They used each analysis to set their next goals, each with a specified timescale.
Example 2
# The Time 100 reports that a SWOT analysis of the car manufacturer, Skoda, found that they had an excellent and well-liked product, but they only had a small percentage of the UK market.
The analysis included surveys of Skoda customers and an assessment of its place in the market. Skoda owners were found to be satisfied with their cars, but the company had only a 1.7 percent market share. The brand was found to be perceived as outdated, although Skoda was no longer seen as producing poor copies of competitor's cars. The SWOT analysis showed that Skoda needed to build its brand in order to grow its market share. They capitalized on this opportunity by creating a new advertising campaign, focusing on the positive feedback that they had received from customers, and then launched a marketing campaign based on the happy customer experience. This campaign allowed Skoda to compete against its rivals by making itself stand out.
Example 3
# A SWOT analysis of the home furnishings chain IKEA was also described by the Times 100. The analysis highlighted IKEA's commitment to sustainability and waste reduction as a major strength. The IKEA brand and their key concept of offering good quality products at affordable prices are also key strengths. The need to keep production costs down could also be viewed as a weakness; however, the growing market for green and sustainable products was identified as an opportunity that they should capitalize on. The current state of the economy is seen as a threat to IKEA's success, but their low prices were expected to help them turn this threat into an opportunity.
How to Evaluate SWOT Analysis
A SWOT (strengths, weaknesses, opportunities and threats) analysis is often performed when looking at a new business venture, competitors or overall business thrust. Evaluating an existing one for accuracy and usefulness can be challenging, but there are key things to check to make the task easier.
Difficulty: Moderately Challenging
Instructions
1.Review the strengths section and verify the facts. Check their accuracy. Determine if the strengths listed are truly strengths or just "nice-to-haves." An example of a strength is an easily recognizable brand, such as the one established by the Kelloggs food company.
2.Review the weaknesses section and check the facts in a similar manner. For example, a weakness can be the lack of a large hard drive in a new laptop model.
3.Review the opportunities section and analyze subjectively what each opportunity means. Try to assess the importance of each. An opportunity for any company that helps to save energy resources is the renewed focus on environmentalism brought forth by the "green" movement.
4.Brainstorm any opportunities that may not have been included in the analysis, and play devil's advocate with each to see if they are worth including. For example, the approval of the North American Free Trade Agreement provided business opportunities by lowering trade restrictions.
5.Analyze the threat section by reviewing the resources used to see if you agree that each threat is really a threat. An example of a perceived threat is the enforcement of the child labor laws facing major electronics manufacturers in Asia today.
6.Perform additional research to see if any threats were missed. Add them to the analysis if they make sense.
7.Make all changes needed from Steps 1 through 6 and see if the analysis conclusion or outcome has changed. Use the overall picture gained from the analysis to see if any changes are needed in your project, product or new business strategy. Create plans to address any weaknesses and prepare for any threats that have been identified as real.
Difficulty: Moderately Challenging
Instructions
1.Review the strengths section and verify the facts. Check their accuracy. Determine if the strengths listed are truly strengths or just "nice-to-haves." An example of a strength is an easily recognizable brand, such as the one established by the Kelloggs food company.
2.Review the weaknesses section and check the facts in a similar manner. For example, a weakness can be the lack of a large hard drive in a new laptop model.
3.Review the opportunities section and analyze subjectively what each opportunity means. Try to assess the importance of each. An opportunity for any company that helps to save energy resources is the renewed focus on environmentalism brought forth by the "green" movement.
4.Brainstorm any opportunities that may not have been included in the analysis, and play devil's advocate with each to see if they are worth including. For example, the approval of the North American Free Trade Agreement provided business opportunities by lowering trade restrictions.
5.Analyze the threat section by reviewing the resources used to see if you agree that each threat is really a threat. An example of a perceived threat is the enforcement of the child labor laws facing major electronics manufacturers in Asia today.
6.Perform additional research to see if any threats were missed. Add them to the analysis if they make sense.
7.Make all changes needed from Steps 1 through 6 and see if the analysis conclusion or outcome has changed. Use the overall picture gained from the analysis to see if any changes are needed in your project, product or new business strategy. Create plans to address any weaknesses and prepare for any threats that have been identified as real.
Importance of SWOT Analysis
A SWOT analysis is a tool for companies to assess the industry and to develop strategies to remain competitive. This is a simple way to focus aspects of the company and business sector and to organize the findings to evaluate the current status of the business, future prospects and the economic climate. A SWOT analysis promotes critical and specific thinking to enhance strategic plans and objectives. The SWOT analysis has been used as a business concept since the 1960s and has shown its value when applied to organizations, management structure and marketing.
History
1. Albert Humphrey from Stanford University is credited as the developer of the Strengths, Weaknesses, Opportunities and Threats--or SWOT--analysis, which derived from the Team Action Model research project. TAM is a business concept that supports executives in effectively managing change. SWOT extends from the TAM concept. George Albert Smith Jr. and C. Roland Christiensen from Harvard Business School are credited with the acronym during the 1950s and 1960s to evaluate gaps and resources within companies as an organizational strategy. The SWOT concepts were refined over the years to become one of today's marketing tools.
Significance
2. The SWOT analysis is a key component in strategic planning. The analysis subjectively evaluates the impact of internal and external factors for a business objective. Internal processes and resources are considered strengths and weaknesses (S and W, respectively). External factors affecting the business and industry are considered opportunities and threats (O and T, respectively). An evaluation of these factors develops a strategic perspective that includes the competitive landscape and current market conditions.
Features
3. SWOT analysis can include:
Strengths: Experience and expertise; new and current products; quality and reputation; resources and access to distributors; location
Weaknesses: Deficiencies in access and experience; brand name recognition and reputation; perceived value; costs
Opportunities: Emerging markets and technologies; strategic partnerships and alliances; changes in regulations and policies; expansion into other geographic areas or industries; diminishing competition
Threats: Generic or updated products or technologies; increased scrutiny and tighter regulations; competitors entering the marketplace; increased costs for resources
Considerations
4. A SWOT analysis is subjective yet concise. Overanalysis and generalizations have limited value in preparing a strategic perspective. The factors in the SWOT analysis should reflect the actual internal status of the business and its future prospects, as well as external forces within the industry so that an action plan can be prepared. Other tools such as Porter's Five Force analysis can supplement information in a SWOT.
Misconceptions
5. Strategy should not be based solely on a SWOT analysis. The value of a SWOT analysis is to prepare a snapshot of the current competitive landscape and to identify areas that can be improved, internally. A SWOT analysis can provide companies with discrete insight regarding prioritizing strategies and tactics to gain an advantage. Preparing a SWOT analysis is not complicated; it should be revisited on a regular basis to evaluate the impact of strategies in an ever-changing economy.
History
1. Albert Humphrey from Stanford University is credited as the developer of the Strengths, Weaknesses, Opportunities and Threats--or SWOT--analysis, which derived from the Team Action Model research project. TAM is a business concept that supports executives in effectively managing change. SWOT extends from the TAM concept. George Albert Smith Jr. and C. Roland Christiensen from Harvard Business School are credited with the acronym during the 1950s and 1960s to evaluate gaps and resources within companies as an organizational strategy. The SWOT concepts were refined over the years to become one of today's marketing tools.
Significance
2. The SWOT analysis is a key component in strategic planning. The analysis subjectively evaluates the impact of internal and external factors for a business objective. Internal processes and resources are considered strengths and weaknesses (S and W, respectively). External factors affecting the business and industry are considered opportunities and threats (O and T, respectively). An evaluation of these factors develops a strategic perspective that includes the competitive landscape and current market conditions.
Features
3. SWOT analysis can include:
Strengths: Experience and expertise; new and current products; quality and reputation; resources and access to distributors; location
Weaknesses: Deficiencies in access and experience; brand name recognition and reputation; perceived value; costs
Opportunities: Emerging markets and technologies; strategic partnerships and alliances; changes in regulations and policies; expansion into other geographic areas or industries; diminishing competition
Threats: Generic or updated products or technologies; increased scrutiny and tighter regulations; competitors entering the marketplace; increased costs for resources
Considerations
4. A SWOT analysis is subjective yet concise. Overanalysis and generalizations have limited value in preparing a strategic perspective. The factors in the SWOT analysis should reflect the actual internal status of the business and its future prospects, as well as external forces within the industry so that an action plan can be prepared. Other tools such as Porter's Five Force analysis can supplement information in a SWOT.
Misconceptions
5. Strategy should not be based solely on a SWOT analysis. The value of a SWOT analysis is to prepare a snapshot of the current competitive landscape and to identify areas that can be improved, internally. A SWOT analysis can provide companies with discrete insight regarding prioritizing strategies and tactics to gain an advantage. Preparing a SWOT analysis is not complicated; it should be revisited on a regular basis to evaluate the impact of strategies in an ever-changing economy.
Library SWOT Analysis
Analyzing the strengths, weaknesses, opportunities and threats---the SWOT---facing your library is an important part of strategic planning, which is vital to the continued success of libraries of all types, including academic, public and special. As the Northeast Kansas Library System noted in an internal audit, conducting a library SWOT analysis "will help you to focus your library's services and programs on areas where you are strong and where the greatest opportunities lie."
Strengths
1. Assessing a library's strengths, areas in which it is already successful, includes looking at staff skills and competencies, programming, budget maintenance and community relations. Planning for the library's future based on its strengths should include ways to maintain and improve existing success.
Weaknesses
2. Analyzing a library's weaknesses also means evaluating internal operations. G. Edward Evans and Patricia Layzell Ward, authors of "Management Basics for Information Professionals," point out that weaknesses may lie in the same areas as strengths. Careful analysis of library weaknesses suggests which areas need improvement. Weaknesses also identify areas that need attention to reduce the negative impact of their weaknesses.
Opportunities
3. Factors outside the library itself should be evaluated to see what could be acted upon to benefit the library. Library opportunities may present themselves in "economic, political/legal, technological, or sociocultural environments," says Anthony C. Danca in his analysis of SWOT. For example, awareness of a high economic status of the library's main patron base provides a population likely to participate in fund-raising activities.
Threats
4. Analyzing library threats also means evaluating factors outside the library that hinder its success. Like opportunities, many threats stem from the economic and political environment, says Danca. For example, economic downturns threaten to reduce the budgets of publicly funded libraries. Maintaining current awareness of threats allows the library administration to plan and act. This area requires frequent attention because the external environment often changes quickly.
Other Considerations
5. Evans and Ward explain that although conducting a library SWOT analysis takes significant time, the benefits are worth it. They further explain that the analysis fosters thinking through the planning process based on the external library environment and the internal library capabilities. The analysis process provides information on the current state of internal and external factors, many of which directly impact the continued viability of the library organization.
Strengths
1. Assessing a library's strengths, areas in which it is already successful, includes looking at staff skills and competencies, programming, budget maintenance and community relations. Planning for the library's future based on its strengths should include ways to maintain and improve existing success.
Weaknesses
2. Analyzing a library's weaknesses also means evaluating internal operations. G. Edward Evans and Patricia Layzell Ward, authors of "Management Basics for Information Professionals," point out that weaknesses may lie in the same areas as strengths. Careful analysis of library weaknesses suggests which areas need improvement. Weaknesses also identify areas that need attention to reduce the negative impact of their weaknesses.
Opportunities
3. Factors outside the library itself should be evaluated to see what could be acted upon to benefit the library. Library opportunities may present themselves in "economic, political/legal, technological, or sociocultural environments," says Anthony C. Danca in his analysis of SWOT. For example, awareness of a high economic status of the library's main patron base provides a population likely to participate in fund-raising activities.
Threats
4. Analyzing library threats also means evaluating factors outside the library that hinder its success. Like opportunities, many threats stem from the economic and political environment, says Danca. For example, economic downturns threaten to reduce the budgets of publicly funded libraries. Maintaining current awareness of threats allows the library administration to plan and act. This area requires frequent attention because the external environment often changes quickly.
Other Considerations
5. Evans and Ward explain that although conducting a library SWOT analysis takes significant time, the benefits are worth it. They further explain that the analysis fosters thinking through the planning process based on the external library environment and the internal library capabilities. The analysis process provides information on the current state of internal and external factors, many of which directly impact the continued viability of the library organization.
SWOT Analysis of a College
A strengths, weaknesses, opportunities and threats analysis is a tool used in businesses and other organizations to assess the potential upsides and liabilities of marketing plans and strategies, new business ventures and even hiring new employees. SWOT analyses have many applications in addition to those stated, though.
Strengths
1. The strengths section of a SWOT analysis should look inward on an organization. This is the section where a college would identify the internal strengths it possesses. For example, some colleges cite in this section high enrollment, high student retention, low student to teacher ratios, high graduation rates, experienced and effective faculty and a competitive academic environment.
Weaknesses
2. The weaknesses section of a SWOT analysis should also look inward on an organization. This is the section where a college would identify the internal weaknesses it faces. For example, some colleges might cite in this section low post-graduation employment rates, high staff and faculty turnover, a lack of student parking, high tuition rates or low school pride.
Opportunities
3. The opportunities section of a SWOT analysis should look at the external environment of an organization. The opportunities should entail local to distant factors that could lead to growth or improvement. This is the section where a college would identify those opportunities for growth or improvement. For example, some colleges cite in this section a large alumni pool, unused office capacity, training seminars and conventions, or competitor universities dropping degree programs or reducing incoming class sizes.
Threats
4. The threats section of a SWOT analysis should also look at the external environment of an organization. The threats should entail local to distant factors that could cause atrophy, decline or harm at an organization. This is the section where a college would identify those threats that would harm the college's current growth or status quo. For example, some colleges cite in this section community college growth, academic building erosion and wear, high health care costs, dissatisfied alumni, a poor economy, increasing online courses or smaller high school graduation classes.
Constructing a SWOT Analysis
5. With the strengths, weaknesses, opportunities and threats all drafted, taking that information and placing it in a chart is the next step. The way to display a SWOT analysis is by constructing a chart with the strengths listed in the upper left portion, weaknesses listed in the upper right portion, opportunities listed in the lower left portion and threats listed in the lower right portion.
Strengths
1. The strengths section of a SWOT analysis should look inward on an organization. This is the section where a college would identify the internal strengths it possesses. For example, some colleges cite in this section high enrollment, high student retention, low student to teacher ratios, high graduation rates, experienced and effective faculty and a competitive academic environment.
Weaknesses
2. The weaknesses section of a SWOT analysis should also look inward on an organization. This is the section where a college would identify the internal weaknesses it faces. For example, some colleges might cite in this section low post-graduation employment rates, high staff and faculty turnover, a lack of student parking, high tuition rates or low school pride.
Opportunities
3. The opportunities section of a SWOT analysis should look at the external environment of an organization. The opportunities should entail local to distant factors that could lead to growth or improvement. This is the section where a college would identify those opportunities for growth or improvement. For example, some colleges cite in this section a large alumni pool, unused office capacity, training seminars and conventions, or competitor universities dropping degree programs or reducing incoming class sizes.
Threats
4. The threats section of a SWOT analysis should also look at the external environment of an organization. The threats should entail local to distant factors that could cause atrophy, decline or harm at an organization. This is the section where a college would identify those threats that would harm the college's current growth or status quo. For example, some colleges cite in this section community college growth, academic building erosion and wear, high health care costs, dissatisfied alumni, a poor economy, increasing online courses or smaller high school graduation classes.
Constructing a SWOT Analysis
5. With the strengths, weaknesses, opportunities and threats all drafted, taking that information and placing it in a chart is the next step. The way to display a SWOT analysis is by constructing a chart with the strengths listed in the upper left portion, weaknesses listed in the upper right portion, opportunities listed in the lower left portion and threats listed in the lower right portion.
How to Facilitate SWOT Analysis
A SWOT analysis is an approach commonly used in organizational settings to facilitate decision making. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. By mapping out these factors, organizations can assess internal and external factors that can either assist them in achieving objectives, or present obstacles that must be overcome. While SWOT analysis is conceptually simple, the process requires some effort to do it well.
Difficulty: Moderately Easy
Instructions
1.Explain the goal of SWOT analysis to the exercise participants. This will help them identify relevant factors that fit into the SWOT categories.
2.Split up the participants into groups. Each group should have no more than four participants.
3.Give each group of participants a sheet of paper on which you have previously drawn a blank SWOT matrix. This is a table with two rows and two columns, where the left column consists of internal factors (strengths and weakness on the top and bottom row, respectively), and the right column has the external factors (opportunities and threats on the top and bottom row, respectively).
4. Ask each group of participants to jot down factors that belong in the respective cells in the table. Give them a predetermined amount of time to work on it.
5. Draw a large version of the blank SWOT matrix on the flip chart. Ask a member of each group in turn to come up to the flip chart, and write their group's results in the respective cells, using a different colored marker for each cell. Also ask them to explain to everyone their rationale for the factors they identified.
6. Allow some time for free discussion, then consolidate the results into a set of strengths, weaknesses, opportunities, and threats in which all participants can agree.
Difficulty: Moderately Easy
Instructions
1.Explain the goal of SWOT analysis to the exercise participants. This will help them identify relevant factors that fit into the SWOT categories.
2.Split up the participants into groups. Each group should have no more than four participants.
3.Give each group of participants a sheet of paper on which you have previously drawn a blank SWOT matrix. This is a table with two rows and two columns, where the left column consists of internal factors (strengths and weakness on the top and bottom row, respectively), and the right column has the external factors (opportunities and threats on the top and bottom row, respectively).
4. Ask each group of participants to jot down factors that belong in the respective cells in the table. Give them a predetermined amount of time to work on it.
5. Draw a large version of the blank SWOT matrix on the flip chart. Ask a member of each group in turn to come up to the flip chart, and write their group's results in the respective cells, using a different colored marker for each cell. Also ask them to explain to everyone their rationale for the factors they identified.
6. Allow some time for free discussion, then consolidate the results into a set of strengths, weaknesses, opportunities, and threats in which all participants can agree.
The SWOT Analysis Technique
A SWOT analysis is a strategic planning technique that involves looking at a company's internal situation and the external business environment to determine the company's strengths, weaknesses, opportunities and threats with regard to a particular goal.
Strengths
1. Strengths are internal factors that will assist in achieving the desired goal. Patents, supplier relationships, brand recognition and reputation are all examples of strengths.
Weaknesses
2. Weaknesses are internal factors that may interfere with achievement of the desired goal. Lack of internal knowledge and skills, poor reputation and high cost structure are some examples of weaknesses.
Opportunities
3. Opportunities are external factors or conditions favorable to achieving the desired goal. Some examples of opportunities are loosened government regulations, new technologies and increased consumer demand.
Threats
4. Threats are external factors or conditions unfavorable to achieving the desired goal. Some examples of threats are tightened governmental regulations, marketplace competition and shifting consumer tastes.
Using the SWOT Analysis
5. When the SWOT analysis is complete, the management team can review the various factors and determine whether it's possible and feasible to pursue the stated goal. If so, project managers should develop a plan to capitalize on each of the strengths and opportunities and mitigate each of the weaknesses and threats.
Strengths
1. Strengths are internal factors that will assist in achieving the desired goal. Patents, supplier relationships, brand recognition and reputation are all examples of strengths.
Weaknesses
2. Weaknesses are internal factors that may interfere with achievement of the desired goal. Lack of internal knowledge and skills, poor reputation and high cost structure are some examples of weaknesses.
Opportunities
3. Opportunities are external factors or conditions favorable to achieving the desired goal. Some examples of opportunities are loosened government regulations, new technologies and increased consumer demand.
Threats
4. Threats are external factors or conditions unfavorable to achieving the desired goal. Some examples of threats are tightened governmental regulations, marketplace competition and shifting consumer tastes.
Using the SWOT Analysis
5. When the SWOT analysis is complete, the management team can review the various factors and determine whether it's possible and feasible to pursue the stated goal. If so, project managers should develop a plan to capitalize on each of the strengths and opportunities and mitigate each of the weaknesses and threats.
Investment and SWOT Analysis
SWOT analysis is a strategic planning method devised in order to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a project, company or business venture. When it comes to investors, they are concerned with the returns on their investments. SWOT analysis is used to show potential investors the value of the venture and thus their investment.
Definition
1. SWOT analyzes Strengths, Weaknesses, Opportunities and Threats to help investors make better business decisions. This study contains vital information to appeal to, and even dissuade, potential investors from a specific project or business venture. SWOT analysis was devised by Albert Humphrey who, while working at the Stanford Research Institute, produced a method for planning, then called SOFT analysis (Satisfactory, Opportunity, Fault and Threat). This was further developed into what we know today as SWOT analysis.
Features
2. The following are the components and the various corresponding factors taken into account during a SWOT analysis. When looking at strengths, relative size of the industry, balance sheet strength, cash flows, brand/product perception and areas of expertise are the relevant factors. In weaknesses, factors such as a negative balance sheet, poor public perception, problems in management and competitors' advantages must be considered. Factors such as growth prospects, technological advancements and potential investments are relevant for the opportunities component whereas internal problems, financial constraints, cash flow issues, relative position of the company in industry and threatening technological advancements are significant components in the threats category.
Significance
3. SWOT analysis is a key component of effective strategic planning. It subjectively evaluates the impact of internal and external factors in achieving a business objective. The internal processes of a company are considered as its strengths and weaknesses while the external factors affecting the business of a company are considered opportunities and threats. Through SWOT analysis, one hopes to develop a strategic perspective about the standing of a particular project in the industry landscape.
Considerations
4. A SWOT analysis is always subjective and concise; thus, it has limited value in ensuring investors that they are making strategically sound and precise business decisions. Efforts should be made to make the analysis as detailed as possible regarding the internal status of the business and the future growth one may expect in the future.
Misconceptions
5. It is not advisable for investors to solely base their decision on a SWOT analysis. The agenda of a SWOT analysis is to prepare a snapshot of the current situation of the company as well as its future prospects. An effectively pursued SWOT analysis can provide companies invaluable insight into their industry, helping them to understand the tactics they need to employ to gain a competitive advantage. Once pursued, a SWOT analysis should be regularly revisited to evaluate the impact of current strategies in a technologically fast-paced economy.
Definition
1. SWOT analyzes Strengths, Weaknesses, Opportunities and Threats to help investors make better business decisions. This study contains vital information to appeal to, and even dissuade, potential investors from a specific project or business venture. SWOT analysis was devised by Albert Humphrey who, while working at the Stanford Research Institute, produced a method for planning, then called SOFT analysis (Satisfactory, Opportunity, Fault and Threat). This was further developed into what we know today as SWOT analysis.
Features
2. The following are the components and the various corresponding factors taken into account during a SWOT analysis. When looking at strengths, relative size of the industry, balance sheet strength, cash flows, brand/product perception and areas of expertise are the relevant factors. In weaknesses, factors such as a negative balance sheet, poor public perception, problems in management and competitors' advantages must be considered. Factors such as growth prospects, technological advancements and potential investments are relevant for the opportunities component whereas internal problems, financial constraints, cash flow issues, relative position of the company in industry and threatening technological advancements are significant components in the threats category.
Significance
3. SWOT analysis is a key component of effective strategic planning. It subjectively evaluates the impact of internal and external factors in achieving a business objective. The internal processes of a company are considered as its strengths and weaknesses while the external factors affecting the business of a company are considered opportunities and threats. Through SWOT analysis, one hopes to develop a strategic perspective about the standing of a particular project in the industry landscape.
Considerations
4. A SWOT analysis is always subjective and concise; thus, it has limited value in ensuring investors that they are making strategically sound and precise business decisions. Efforts should be made to make the analysis as detailed as possible regarding the internal status of the business and the future growth one may expect in the future.
Misconceptions
5. It is not advisable for investors to solely base their decision on a SWOT analysis. The agenda of a SWOT analysis is to prepare a snapshot of the current situation of the company as well as its future prospects. An effectively pursued SWOT analysis can provide companies invaluable insight into their industry, helping them to understand the tactics they need to employ to gain a competitive advantage. Once pursued, a SWOT analysis should be regularly revisited to evaluate the impact of current strategies in a technologically fast-paced economy.
How to Write a Good SWOT Analysis
Writing a SWOT analysis is a frequent need in many areas of business, from product development to marketing. SWOT is the acronym for Strengths, Weaknesses, Opportunities and Threats. Normally, a SWOT analysis takes the form of a four-part grid, addressing each of the four factors. Basic SWOT analyses are often off-the-cuff exercises, leading to a simple chart, without adequate perspective on how best to react to threats and opportunities, and where strengths and weaknesses originated. A good SWOT analysis can get you thinking about new strategic directions, address fundamental structural issues in your business and move forward toward new initiatives.
Difficulty: Moderate
Instructions
1. Gather information from various departments on company strengths and weaknesses, if the SWOT analysis is for an entire organization. If the analysis is for a single department, solicit information from all members of the department--everyone has valuable insights to share. Many quickly-made SWOT analyses are based solely on the creator's interpretation and understanding of a business situation, rather than on multiple perspectives, so incorporating interdisciplinary perspectives will greatly enhance the value of the analysis.
2. Develop the Strengths and Weaknesses sections first, since they form part of the basis for analyzing the potential impact of the opportunities and threats. Focus on the top three to eight strengths and weakness of the organization or department. Provide details on each strength and weakness. Rather than simply list all the strengths and weaknesses you can think of, without details, as in a basic SWOT analysis, provide insight into how each originated. For a truly effective analysis, suggest ways to enhance strengths and minimize weaknesses.
3. Gather information on overall industry and economic conditions to gain insight into both Opportunities and Threats. Don't analyze only your industry, but also look at allied industries, and the economy as a whole, to make your SWOT analysis better. Look at factors such outsourcing, the growth of the industry, potential new technologies and all other changes you foresee, even if you are not sure if they are a threat or an opportunity. It is quite possible for some factors in your industry to be both. You will analyze the potential impact of all changes in the light of your strengths and weaknesses.
4. Identify your top competitors. Analyze those organizations, looking at their product lines, market share and other factors that will help you identify how much of a competitive threat they are.
5. Determine which changes and developments in your industry are threats, and which are opportunities. Don't hesitate to identify a development as potentially both, highlighting which contingencies could make a new factor a threat, and which contingencies would make it an opportunity--something that will add greater depth the the analysis. Identify three to eight threats and opportunities. To enhance the value of the SWOT analysis, offer possible responses to all threats, and ways of taking advantage of all opportunities.
Difficulty: Moderate
Instructions
1. Gather information from various departments on company strengths and weaknesses, if the SWOT analysis is for an entire organization. If the analysis is for a single department, solicit information from all members of the department--everyone has valuable insights to share. Many quickly-made SWOT analyses are based solely on the creator's interpretation and understanding of a business situation, rather than on multiple perspectives, so incorporating interdisciplinary perspectives will greatly enhance the value of the analysis.
2. Develop the Strengths and Weaknesses sections first, since they form part of the basis for analyzing the potential impact of the opportunities and threats. Focus on the top three to eight strengths and weakness of the organization or department. Provide details on each strength and weakness. Rather than simply list all the strengths and weaknesses you can think of, without details, as in a basic SWOT analysis, provide insight into how each originated. For a truly effective analysis, suggest ways to enhance strengths and minimize weaknesses.
3. Gather information on overall industry and economic conditions to gain insight into both Opportunities and Threats. Don't analyze only your industry, but also look at allied industries, and the economy as a whole, to make your SWOT analysis better. Look at factors such outsourcing, the growth of the industry, potential new technologies and all other changes you foresee, even if you are not sure if they are a threat or an opportunity. It is quite possible for some factors in your industry to be both. You will analyze the potential impact of all changes in the light of your strengths and weaknesses.
4. Identify your top competitors. Analyze those organizations, looking at their product lines, market share and other factors that will help you identify how much of a competitive threat they are.
5. Determine which changes and developments in your industry are threats, and which are opportunities. Don't hesitate to identify a development as potentially both, highlighting which contingencies could make a new factor a threat, and which contingencies would make it an opportunity--something that will add greater depth the the analysis. Identify three to eight threats and opportunities. To enhance the value of the SWOT analysis, offer possible responses to all threats, and ways of taking advantage of all opportunities.
Retailer SWOT Analysis
A SWOT analysis evaluates a business's Strengths, Weaknesses, Opportunities and Threats. Although a SWOT analysis could be ordered regarding a retailer as a whole, a retailer could also commission a SWOT analysis to address the potential gains and losses involved with launching a new clothing line, opening new branches or even changing distribution methods. SWOT analyses have many applications in addition to these.
Strengths
1. When generating the strengths portion of the SWOT analysis, address and list the internal components that give your business a competitive edge or are its high-performing areas. For example, this section would list a large customer base, high brand recognition, a durable product line, an efficient distribution chain, low staff turnover and low overhead. These examples could apply to any retailer, but they would only appear in the strengths section because they are positive attributes about the internal business environment.
Weaknesses
2. When generating the weaknesses portion of the SWOT analysis, address and list the internal components that are performing at a sub-par level or are simply hindering your business from performing better. For example, this section might list poor customer service, long waiting lines, a small amount of inventory, faulty product lines and low staff morale. These examples could apply to any retailer, but they would only appear in the weaknesses section because they are negative attributes about the internal business environment.
Opportunities
3. When generating the opportunities portion of the SWOT analysis, list the external features that would provide your business an opportunity to grow or expand. For example, this section might list less strict international labor laws, a decrease in the price of raw materials, fewer competitors, local population growth or a growing economy. These examples could apply to any retailer, but they would only appear in the opportunities section because they are features in the external business environment that the retailer could take advantage of.
Threats
4. When generating the threats portion of the SWOT analysis, list the external features that could possibly harm the growth or current status of your business. For example, this section might list a declining early-adopter customer base, more competitors entering the marketplace, rising business tax rates, manufacturers discontinuing product lines or shrinking of overall demand. These examples could apply to any retailer, but they would only appear in the threats section because they are features or elements in the external business environment that the retailer may struggle to adapt to or struggle to compete against.
How to build the SWOT Analysis
5. A SWOT analysis should be formatted to fit in a two-by-two chart where the strengths and weaknesses are listed in the top two boxes and the opportunities and threats are listed in the bottom two boxes. Make sure the strengths and opportunities are placed in the left two boxes and the weaknesses and threats are in the right two boxes.
Strengths
1. When generating the strengths portion of the SWOT analysis, address and list the internal components that give your business a competitive edge or are its high-performing areas. For example, this section would list a large customer base, high brand recognition, a durable product line, an efficient distribution chain, low staff turnover and low overhead. These examples could apply to any retailer, but they would only appear in the strengths section because they are positive attributes about the internal business environment.
Weaknesses
2. When generating the weaknesses portion of the SWOT analysis, address and list the internal components that are performing at a sub-par level or are simply hindering your business from performing better. For example, this section might list poor customer service, long waiting lines, a small amount of inventory, faulty product lines and low staff morale. These examples could apply to any retailer, but they would only appear in the weaknesses section because they are negative attributes about the internal business environment.
Opportunities
3. When generating the opportunities portion of the SWOT analysis, list the external features that would provide your business an opportunity to grow or expand. For example, this section might list less strict international labor laws, a decrease in the price of raw materials, fewer competitors, local population growth or a growing economy. These examples could apply to any retailer, but they would only appear in the opportunities section because they are features in the external business environment that the retailer could take advantage of.
Threats
4. When generating the threats portion of the SWOT analysis, list the external features that could possibly harm the growth or current status of your business. For example, this section might list a declining early-adopter customer base, more competitors entering the marketplace, rising business tax rates, manufacturers discontinuing product lines or shrinking of overall demand. These examples could apply to any retailer, but they would only appear in the threats section because they are features or elements in the external business environment that the retailer may struggle to adapt to or struggle to compete against.
How to build the SWOT Analysis
5. A SWOT analysis should be formatted to fit in a two-by-two chart where the strengths and weaknesses are listed in the top two boxes and the opportunities and threats are listed in the bottom two boxes. Make sure the strengths and opportunities are placed in the left two boxes and the weaknesses and threats are in the right two boxes.
Student SWOT Analysis
A SWOT diagram is a simple matrix that illustrates strengths, weaknesses, opportunities and threats. Creating SWOT analysis charts with students can be an exploration, a chance to inspire learning and to capitalize on students' natural abilities. In the context of educational goals, students and teachers should work together to compile characteristics within the grid. That will keep students focused on solutions, turning what might be perceived as a negative into a positive.
History
1. The origins of SWOT analysis are unclear, but multiple reports give credit to professors at Harvard and Stanford universities, anywhere from the 1920s to the 1960s, as they studied groups of executives and their ability to effect change within their companies. The use of this assessment tool as it relates to students encourages them to take control of their educational goals.
Significance
2. A student SWOT assessment diagram is a subjective approach to problem solving, project planning and reviewing education from all angles. It is a strategy formation modified to specifically relate to students, helping teachers evaluate students' skills. Utilizing a SWOT model also creates realistic expectations between students and their teachers.
Function
3. The diagram itself illustrates academic achievement and points out where more work is required. The analysis breaks down students' characteristics into the four categories: strengths, weaknesses, opportunities and threats. It is a brainstorming tool that allows for a strategic look at problem solving and attempts to maximize solutions, whether focused on a short-term project for a particular class or on long-term goals such as getting a high grade or attending a particular college. Strengths and weaknesses are internal forces, whereas opportunities and threats are external.
Features
4. A student SWOT analysis determines where students rank academically versus where they perceive they are, and puts strong focus on where they could be if they address the weaknesses and threats that keep them from reaching their goals. It is a powerful tool for opening discussion, setting specific targets and inspiring critical thought. It also facilitates teachers attempting to identify their students' individual learning styles.
Benefits
5. By creating a SWOT diagram, students are able to take control of their educational goals and adjust their actions to make more progress. The visual aspect of the model (in matrix or grid form) raises students' self-awareness, creates a dialogue between students and teachers and provides a method by which teachers can gain feedback on their methods. By outlining and defining students' educational assets, teachers can adapt their styles and lesson plans, and capitalize on new learning opportunities, which will likely result in academic success and fulfillment for both student and teacher.
History
1. The origins of SWOT analysis are unclear, but multiple reports give credit to professors at Harvard and Stanford universities, anywhere from the 1920s to the 1960s, as they studied groups of executives and their ability to effect change within their companies. The use of this assessment tool as it relates to students encourages them to take control of their educational goals.
Significance
2. A student SWOT assessment diagram is a subjective approach to problem solving, project planning and reviewing education from all angles. It is a strategy formation modified to specifically relate to students, helping teachers evaluate students' skills. Utilizing a SWOT model also creates realistic expectations between students and their teachers.
Function
3. The diagram itself illustrates academic achievement and points out where more work is required. The analysis breaks down students' characteristics into the four categories: strengths, weaknesses, opportunities and threats. It is a brainstorming tool that allows for a strategic look at problem solving and attempts to maximize solutions, whether focused on a short-term project for a particular class or on long-term goals such as getting a high grade or attending a particular college. Strengths and weaknesses are internal forces, whereas opportunities and threats are external.
Features
4. A student SWOT analysis determines where students rank academically versus where they perceive they are, and puts strong focus on where they could be if they address the weaknesses and threats that keep them from reaching their goals. It is a powerful tool for opening discussion, setting specific targets and inspiring critical thought. It also facilitates teachers attempting to identify their students' individual learning styles.
Benefits
5. By creating a SWOT diagram, students are able to take control of their educational goals and adjust their actions to make more progress. The visual aspect of the model (in matrix or grid form) raises students' self-awareness, creates a dialogue between students and teachers and provides a method by which teachers can gain feedback on their methods. By outlining and defining students' educational assets, teachers can adapt their styles and lesson plans, and capitalize on new learning opportunities, which will likely result in academic success and fulfillment for both student and teacher.
The Usefulness of the SWOT Analysis
# Businesses use SWOT analyses as strategic tools to evaluate their strengths, weaknesses, opportunities and threats. In conjunction with the company's mission, SWOT analyses assist businesses in discovering new strategies to achieve their objectives. These tools help decision-makers see the bigger picture in relation to their business's internal and external environments. SWOT analyses are instrumental in helping companies realize growth and sustain profitability.
Decision-Making
# The Manager's Electronic Resource Center explains that businesses use SWOT analyses for decision-making. When companies are faced with strategic questions about their business, a SWOT analysis can to help them gather and evaluate key information. According to the University of Kent, a SWOT analysis provides strategists with an overview of the company's strengths, weaknesses, opportunities and threats, which helps decision-makers select the best routes for their business. A SWOT analysis can help businesses discover new strategies and take advantage of untapped opportunities.
Understanding Competition
# According to Harvard Business School, it's essential for companies to identify and understand their main competitors. SWOT analyses help companies evaluate their external threats--including competing businesses--to determine whether special action needs to be taken. By studying competition, companies can make adjustments to their own strategies in effort to win a price war or gain other advantages over competitors.
Positive Recognition
# SWOT analyses point out a company's strengths. Sometimes, the good news gets lost amid the hustle and bustle of everyday business life. According to Ecofine, by conducting SWOT analyses, companies get to see where they excel and what they do well.
Positioning
# Since SWOT analyses provide insight into a company's internal and external environments, businesses can use them to determine positioning strategies. When it comes to marketing, a SWOT analysis will inform a company of any potential threats, as well as existing or upcoming opportunities. This information can help a company decide how it should, and should not, position itself in the market.
Decision-Making
# The Manager's Electronic Resource Center explains that businesses use SWOT analyses for decision-making. When companies are faced with strategic questions about their business, a SWOT analysis can to help them gather and evaluate key information. According to the University of Kent, a SWOT analysis provides strategists with an overview of the company's strengths, weaknesses, opportunities and threats, which helps decision-makers select the best routes for their business. A SWOT analysis can help businesses discover new strategies and take advantage of untapped opportunities.
Understanding Competition
# According to Harvard Business School, it's essential for companies to identify and understand their main competitors. SWOT analyses help companies evaluate their external threats--including competing businesses--to determine whether special action needs to be taken. By studying competition, companies can make adjustments to their own strategies in effort to win a price war or gain other advantages over competitors.
Positive Recognition
# SWOT analyses point out a company's strengths. Sometimes, the good news gets lost amid the hustle and bustle of everyday business life. According to Ecofine, by conducting SWOT analyses, companies get to see where they excel and what they do well.
Positioning
# Since SWOT analyses provide insight into a company's internal and external environments, businesses can use them to determine positioning strategies. When it comes to marketing, a SWOT analysis will inform a company of any potential threats, as well as existing or upcoming opportunities. This information can help a company decide how it should, and should not, position itself in the market.
Definition of a SWOT Analysis
Created at Harvard University in the 1920s, the SWOT analysis helps organizations assess issues within and outside of the organization. The SWOT analysis, made up of an assessment of strengths, weaknesses, external opportunities and threats from competition, provides an outline for strategic decision-making.
Purpose
1. Small businesses, large corporations and individuals can utilize the SWOT analysis process for evaluation. By adding a SWOT analysis in their business plans, small businesses can better clarify their short- and long-range strategies. The SWOT analysis, often found in marketing plans, becomes a useful tool for planning and competitive analysis. Organizations often provide a SWOT analysis in a chart format with each segment represented in a different quadrant.
Strengths
2. The strengths segment of a SWOT analysis provides an area to list everything done right either individually or as an organization. This section contains both strengths within the organization and external strengths, such as client relationships. Organizations should seek to reflect their strengths honestly to maintain the integrity of the SWOT analysis. Feedback from others can also provide clarification on strengths captured in this segment of the SWOT analysis.
Weaknesses
3. The weaknesses segment contains needed improvements within an organization or personally. Group sessions can help organizations identify weak areas. Analysis in this segment can provide a clear list of areas that need a development plan to remedy the issues identified. Tools such as action plans and goal formation provide ways to improve weaknesses. From a competitive standpoint, organizations should attempt to mitigate weaknesses as soon as possible since they can offer an undesired opportunity to their competitors.
Opportunities
4. Opportunities for improvement exist within all organizations. This makes the opportunities segment of the SWOT analysis important. Within this segment, organizations identify internal and external opportunities. To have a comprehensive list, organizations sometimes use group facilitation to identify these opportunities. Organizations can add both current and future opportunities to this segment of the quadrant.
Threats
5. By adding threats, such as new competitors in the market, organizations can implement counter measures prior to the threat occurring. To ensure success, organizations may need to deal with both future and present threats. For individuals creating a SWOT analysis for personal development purposes, an example of a threat such as job security problems, would reside in this section of the SWOT analysis.
Purpose
1. Small businesses, large corporations and individuals can utilize the SWOT analysis process for evaluation. By adding a SWOT analysis in their business plans, small businesses can better clarify their short- and long-range strategies. The SWOT analysis, often found in marketing plans, becomes a useful tool for planning and competitive analysis. Organizations often provide a SWOT analysis in a chart format with each segment represented in a different quadrant.
Strengths
2. The strengths segment of a SWOT analysis provides an area to list everything done right either individually or as an organization. This section contains both strengths within the organization and external strengths, such as client relationships. Organizations should seek to reflect their strengths honestly to maintain the integrity of the SWOT analysis. Feedback from others can also provide clarification on strengths captured in this segment of the SWOT analysis.
Weaknesses
3. The weaknesses segment contains needed improvements within an organization or personally. Group sessions can help organizations identify weak areas. Analysis in this segment can provide a clear list of areas that need a development plan to remedy the issues identified. Tools such as action plans and goal formation provide ways to improve weaknesses. From a competitive standpoint, organizations should attempt to mitigate weaknesses as soon as possible since they can offer an undesired opportunity to their competitors.
Opportunities
4. Opportunities for improvement exist within all organizations. This makes the opportunities segment of the SWOT analysis important. Within this segment, organizations identify internal and external opportunities. To have a comprehensive list, organizations sometimes use group facilitation to identify these opportunities. Organizations can add both current and future opportunities to this segment of the quadrant.
Threats
5. By adding threats, such as new competitors in the market, organizations can implement counter measures prior to the threat occurring. To ensure success, organizations may need to deal with both future and present threats. For individuals creating a SWOT analysis for personal development purposes, an example of a threat such as job security problems, would reside in this section of the SWOT analysis.
The Definition of SWOT Analysis
Good marketing plans always begin with a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. A tool used in marketing campaigns and other strategic planning, like public relations, a SWOT analysis is indispensable in marketing a business. According to MarketingTeacher.com, a SWOT also can be used to audit the overall effectiveness of a business or organization.
Strengths
1. One of the internal factors that relates to marketing a business is its strengths. Examples of strengths include aspects that make you stand out as a business, what your company does well and what advantages you have over competitors. An example of a strength is a product or service that you provide exclusive of your competition. You might have a patented product or service that cannot be duplicated by your competitor.
Weaknesses
2. Another internal factor that relates to marketing are the weaknesses of the business and personnel. Examples of weaknesses include areas of customer complaints, decreasing sales statistics and low employee morale. Financial losses are also a weakness for any business.
Opportunites
3. Opportunities as reported in a SWOT analysis are external factors that can help the business. In this part of the SWOT, researchers should ask themselves questions related to uncovering opportunities that might not be readily apparent to the management team. Are there any emerging technologies or trends that will benefit the company? Another question related to uncovering opportunities is: What has my competitor not yet mastered, that we can do better? By analyzing your competition, your business can determine what other similar businesses do well and look for opportunities to produce a similar service or product even better.
Threats
4. In any business or organization, there are threats---the other external factor a business must consider when analyzing its market potential. Threats can include areas where competitors are thriving, and your business is struggling. Additional threats are new laws or regulations that force a change in your business structure; changing consumer tastes; and new products or services that meet consumer needs at a lower cost. According to WebsiteMarketingPlan.com, carefully analyzing threats helps you see the big picture and predict future issues that can arise.
Expanded SWOT
5. An expanded SWOT analysis also can be conducted. An expanded analysis will further probe the elements that relate to effectively marketing and developing a business. Expanded SWOT analysis will also further analyze trends and the local business environment, helping to determine your competition's growth or failures.
Strengths
1. One of the internal factors that relates to marketing a business is its strengths. Examples of strengths include aspects that make you stand out as a business, what your company does well and what advantages you have over competitors. An example of a strength is a product or service that you provide exclusive of your competition. You might have a patented product or service that cannot be duplicated by your competitor.
Weaknesses
2. Another internal factor that relates to marketing are the weaknesses of the business and personnel. Examples of weaknesses include areas of customer complaints, decreasing sales statistics and low employee morale. Financial losses are also a weakness for any business.
Opportunites
3. Opportunities as reported in a SWOT analysis are external factors that can help the business. In this part of the SWOT, researchers should ask themselves questions related to uncovering opportunities that might not be readily apparent to the management team. Are there any emerging technologies or trends that will benefit the company? Another question related to uncovering opportunities is: What has my competitor not yet mastered, that we can do better? By analyzing your competition, your business can determine what other similar businesses do well and look for opportunities to produce a similar service or product even better.
Threats
4. In any business or organization, there are threats---the other external factor a business must consider when analyzing its market potential. Threats can include areas where competitors are thriving, and your business is struggling. Additional threats are new laws or regulations that force a change in your business structure; changing consumer tastes; and new products or services that meet consumer needs at a lower cost. According to WebsiteMarketingPlan.com, carefully analyzing threats helps you see the big picture and predict future issues that can arise.
Expanded SWOT
5. An expanded SWOT analysis also can be conducted. An expanded analysis will further probe the elements that relate to effectively marketing and developing a business. Expanded SWOT analysis will also further analyze trends and the local business environment, helping to determine your competition's growth or failures.
Timberland SWOT Analysis
Among outdoors types, Timberland is a household name for quality clothing and, particularly, hiking boots. The company has been in business for decades and is well-established in various trade markets and the consumer active-wear markets. That said, a history and presence doesn't automatically equal success. A SWOT (strengths, weaknesses, opportunities, and threats) analysis can point out where Timberland needs to seek improvements and bolster its defenses to continue its growth.
Strengths
1. The company has a strong name and brand recognition, which is critical in the retail industry. Most people recognize Timberland as some type of shoe or outerwear clothes maker for outdoor work and activity. SWOT analysis will want to emphasize these points and show how the brand recognition translates into reliable sales annually, even when the economy may be doing badly.
As people have to choosier with their spending during bad times, Timberland does have the ability to argue for the quality of its products. This time-built strength can be pitched as significant value for the dollar spent, convincing consumer to spend a bit more on clothing gear that will last years rather than a cheaper item that only lasts six months.
Timberland has the ability to squeeze its operating costs for more savings. This in turn frees up cash as less gross revenue is eaten up by expenses. Being able to produce cash during hard times allows Timberland to be strategically stronger with resources it can use to expand quickly when needed.
Weaknesses
2. Timberland relies on sales overseas in Europe and Asia. As the strength of the U.S. dollars grows or weakens, this will affect international sales revenue. A strong dollar will decrease sales relative to the Euro or Asian currencies as consumers in those countries effectively buy less. A weaker dollar has the opposite effect on a trade basis.
Part of the company's annual strategy looks to the annual fourth quarter as a "replenishment period, bringing in stronger revenues than normal due to holiday buying. This is a bit of a gamble; if consumers stay stingy during the holidays, then Timberland may find itself waiting for extra revenues that don't manifest. This weakness can cause a disruption without a plan B.
Opportunities
3. As other competitors suffer and fail because of a lack of sales and finicky consumers, Timberland's sales due to strong reputation at worst have been flat. This opens up the ability to push for gaining market share as competitors fail. An analysis should look for these kinds of opportunities and possibly project out what seized market share could mean in increased sales and revenue streams.
Threats
4. Being in retail, Timberland will suffer as the economy suffers since consumer will retrench and hold back on their discretionary spending. Costco, Wal-Mart and Target look far better for necessity clothing when one has to choose with less money. This economy-driven behavior, which Timberland cannot control, will be cyclical and eventually will go away. However, the trick will be to analyze whether Timberland can see this threat coming and has the resources to ride it out.
Conclusion
5. A good SWOT analysis of Timberland will focus on its inherent retail situation and how that is managed both internally and responding to external forces. Timberland has been able to use brand recognition and quality to bolster itself during hard times, but this can only last for so long. Eventually, the company needs to find new growth or cut operating costs to stay in the black. Projections based on opportunities to grab market share from floundering competitors can produce very valuable strategic data for Timberland if it finds the opportunities to seize.
Read more: Timberland SWOT Analysis | eHow.com http://www.ehow.com/about_6002970_timberland-swot-analysis.html#ixzz10o0arsf0
Strengths
1. The company has a strong name and brand recognition, which is critical in the retail industry. Most people recognize Timberland as some type of shoe or outerwear clothes maker for outdoor work and activity. SWOT analysis will want to emphasize these points and show how the brand recognition translates into reliable sales annually, even when the economy may be doing badly.
As people have to choosier with their spending during bad times, Timberland does have the ability to argue for the quality of its products. This time-built strength can be pitched as significant value for the dollar spent, convincing consumer to spend a bit more on clothing gear that will last years rather than a cheaper item that only lasts six months.
Timberland has the ability to squeeze its operating costs for more savings. This in turn frees up cash as less gross revenue is eaten up by expenses. Being able to produce cash during hard times allows Timberland to be strategically stronger with resources it can use to expand quickly when needed.
Weaknesses
2. Timberland relies on sales overseas in Europe and Asia. As the strength of the U.S. dollars grows or weakens, this will affect international sales revenue. A strong dollar will decrease sales relative to the Euro or Asian currencies as consumers in those countries effectively buy less. A weaker dollar has the opposite effect on a trade basis.
Part of the company's annual strategy looks to the annual fourth quarter as a "replenishment period, bringing in stronger revenues than normal due to holiday buying. This is a bit of a gamble; if consumers stay stingy during the holidays, then Timberland may find itself waiting for extra revenues that don't manifest. This weakness can cause a disruption without a plan B.
Opportunities
3. As other competitors suffer and fail because of a lack of sales and finicky consumers, Timberland's sales due to strong reputation at worst have been flat. This opens up the ability to push for gaining market share as competitors fail. An analysis should look for these kinds of opportunities and possibly project out what seized market share could mean in increased sales and revenue streams.
Threats
4. Being in retail, Timberland will suffer as the economy suffers since consumer will retrench and hold back on their discretionary spending. Costco, Wal-Mart and Target look far better for necessity clothing when one has to choose with less money. This economy-driven behavior, which Timberland cannot control, will be cyclical and eventually will go away. However, the trick will be to analyze whether Timberland can see this threat coming and has the resources to ride it out.
Conclusion
5. A good SWOT analysis of Timberland will focus on its inherent retail situation and how that is managed both internally and responding to external forces. Timberland has been able to use brand recognition and quality to bolster itself during hard times, but this can only last for so long. Eventually, the company needs to find new growth or cut operating costs to stay in the black. Projections based on opportunities to grab market share from floundering competitors can produce very valuable strategic data for Timberland if it finds the opportunities to seize.
Read more: Timberland SWOT Analysis | eHow.com http://www.ehow.com/about_6002970_timberland-swot-analysis.html#ixzz10o0arsf0
Product SWOT Analysis
Before any project goes on the market, it's just plain business-savvy to do the research first. An effective market analysis known by the acronym SWOT is performed to determine the strengths, weaknesses, opportunities and threats within a proposed project. These factors should be considered before investing time and money. Throughout history, consumers have seen many products come and then go off the market with lightning speed because SWOT analysis was disregarded.
Benefits
1. SWOT tells managers how a product will hold up on the market. Knowing what the market will bear determines whether the project will stand strong against the competitors. Often if there is no initial competition, such as with a brand new idea, the product's ability to meet a new demand is found within the different areas of the SWOT analysis.
Features
2. New products stay new for what seems to be merely moments once they hit the market. It is common to see the words "new and improved" almost immediately after a product hits the shelves. What is found after determining a new product's viability through the use of a SWOT analysis will determine the focus areas for the product (e.g., the four Ps of marketing: product, price, place and promotion). Often the SWOT analysis includes competitor information for an at-a-glance comparison.
Significance
3. Within the strengths and weaknesses of a product SWOT analysis, a marketing manager can find opportunities. Each level analyzed lays a foundation for the next. In the case of the opportunities level, knowing what the product can do and what the product is up against (e.g., the four Ps of marketing from Section 2), the marketing manager finds opportunities to develop good marketing strategies. The product SWOT analysis shows, through statistical, graphic and other visual means, the pros and cons of producing a product.
Considerations
4. The SWOT analysis on products also carries caveats for the marketing department. Market research is gathered from various populations and sample markets to weigh the possible threats (e.g., competition, public outcry, negative social and/or environmental implications). If it is determined that the product would adversely affect the company in the long run, the marketing manager may scrap it. On the other hand, the product manager can use SWOT analysis to determine whether threats can be tempered by persuasive advertizing.
Summary
5. The importance of a product SWOT analysis is simple. Without using it, the marketer is going up against competitors blind. SWOT is the eyes and ears of the market. Data found within this analysis can save time, money and a company's reputation. Even companies with brands that everyone recognizes and trust would do well to visit and revisit a product through SWOT analysis.
Benefits
1. SWOT tells managers how a product will hold up on the market. Knowing what the market will bear determines whether the project will stand strong against the competitors. Often if there is no initial competition, such as with a brand new idea, the product's ability to meet a new demand is found within the different areas of the SWOT analysis.
Features
2. New products stay new for what seems to be merely moments once they hit the market. It is common to see the words "new and improved" almost immediately after a product hits the shelves. What is found after determining a new product's viability through the use of a SWOT analysis will determine the focus areas for the product (e.g., the four Ps of marketing: product, price, place and promotion). Often the SWOT analysis includes competitor information for an at-a-glance comparison.
Significance
3. Within the strengths and weaknesses of a product SWOT analysis, a marketing manager can find opportunities. Each level analyzed lays a foundation for the next. In the case of the opportunities level, knowing what the product can do and what the product is up against (e.g., the four Ps of marketing from Section 2), the marketing manager finds opportunities to develop good marketing strategies. The product SWOT analysis shows, through statistical, graphic and other visual means, the pros and cons of producing a product.
Considerations
4. The SWOT analysis on products also carries caveats for the marketing department. Market research is gathered from various populations and sample markets to weigh the possible threats (e.g., competition, public outcry, negative social and/or environmental implications). If it is determined that the product would adversely affect the company in the long run, the marketing manager may scrap it. On the other hand, the product manager can use SWOT analysis to determine whether threats can be tempered by persuasive advertizing.
Summary
5. The importance of a product SWOT analysis is simple. Without using it, the marketer is going up against competitors blind. SWOT is the eyes and ears of the market. Data found within this analysis can save time, money and a company's reputation. Even companies with brands that everyone recognizes and trust would do well to visit and revisit a product through SWOT analysis.
SWOT Analysis of Shoppers
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. Firms regularly use SWOT analysis in figuring out how to strengthen their place in the market and to find new opportunities for growth and reputation management. Retail chains normally do SWOT analysis on customers to see what gaps can be filled and how to respond to specific threats and opportunities.
Significance
1. The significance of this sort of analysis is that it helps a retailer understand its retail market through an analysis of its customer base. Primarily, it seeks to fill market gaps and anticipate different types of threats. Market gaps are those holes in a local market where demand is stronger than supply.
Function
2. These types of analyses seek to scientifically figure out how to serve a client base more effectively. It tries to identify certain strengths (such as a good reputation) and build upon them. It also seeks to identify certain weaknesses (such as a high rate of turnover among employees and staff) and implement policies that would eliminate these problems. For SWOT to work properly, it must be objective, base itself around customer surveys and act as an honest barometer of a firm's ability to reach out to its customers.
Considerations
3. The chance to conceptually map out a firm's ability to respond to its client base is of immense importance, especially for smaller retailers competing with huge chains such as WalMart, Kmart or Home Depot. SWOT analysis, from the point of view of a small retail store worried about competition from the major chains, should center around how smaller firms provide, for example, better customer service than larger retail organizations. The purpose of SWOT in this case is for the survival of small firms competing with larger chain stores with superior resources.
Benefits
4. The main benefit of SWOT analysis on retail customers is the ability to serve them better. If a firm has a good reputation and a strong local presence, these can be considered important strengths, while its small size is its weakness. Its opportunity would be to play up its strong local connections, and the threat is the investment of a large chain in the same locality.
Potential
5. A SWOT analysis for a small retailer would more than likely suggest that customer service be featured above all things, and investments should be made in reinforcing its local history through advertising, sponsoring sports teams or even improving its décor to reflect its tradition in the community. A SWOT analysis concerns itself, thematically, with all these things and, thus, centers around customer service and the ability to retain retail customers. Therefore, the potential here is to preserve the small retail chain against the larger one.
Read more: SWOT Analysis of Shoppers | eHow.com http://www.ehow.com/about_5965449_swot-analysis-shoppers.html#ixzz10nzjs9fJ
Significance
1. The significance of this sort of analysis is that it helps a retailer understand its retail market through an analysis of its customer base. Primarily, it seeks to fill market gaps and anticipate different types of threats. Market gaps are those holes in a local market where demand is stronger than supply.
Function
2. These types of analyses seek to scientifically figure out how to serve a client base more effectively. It tries to identify certain strengths (such as a good reputation) and build upon them. It also seeks to identify certain weaknesses (such as a high rate of turnover among employees and staff) and implement policies that would eliminate these problems. For SWOT to work properly, it must be objective, base itself around customer surveys and act as an honest barometer of a firm's ability to reach out to its customers.
Considerations
3. The chance to conceptually map out a firm's ability to respond to its client base is of immense importance, especially for smaller retailers competing with huge chains such as WalMart, Kmart or Home Depot. SWOT analysis, from the point of view of a small retail store worried about competition from the major chains, should center around how smaller firms provide, for example, better customer service than larger retail organizations. The purpose of SWOT in this case is for the survival of small firms competing with larger chain stores with superior resources.
Benefits
4. The main benefit of SWOT analysis on retail customers is the ability to serve them better. If a firm has a good reputation and a strong local presence, these can be considered important strengths, while its small size is its weakness. Its opportunity would be to play up its strong local connections, and the threat is the investment of a large chain in the same locality.
Potential
5. A SWOT analysis for a small retailer would more than likely suggest that customer service be featured above all things, and investments should be made in reinforcing its local history through advertising, sponsoring sports teams or even improving its décor to reflect its tradition in the community. A SWOT analysis concerns itself, thematically, with all these things and, thus, centers around customer service and the ability to retain retail customers. Therefore, the potential here is to preserve the small retail chain against the larger one.
Read more: SWOT Analysis of Shoppers | eHow.com http://www.ehow.com/about_5965449_swot-analysis-shoppers.html#ixzz10nzjs9fJ
Training Need Analysis(TNA)
An analysis of training need is an essential requirement to the design of effective training. The purpose of training need analysis is to determine whether there is a gap between what is required for effective performance and present level of performance.
Why training need analysis?
Training need analysis is conducted to determine whether resources required are available or not. It helps to plan the budget of the company, areas where training is required, and also highlights the occasions where training might not be appropriate but requires alternate action.
Training Need arises at three levels:
Why training need analysis?
Training need analysis is conducted to determine whether resources required are available or not. It helps to plan the budget of the company, areas where training is required, and also highlights the occasions where training might not be appropriate but requires alternate action.
Training Need arises at three levels:
Corporate need and training need are interdependent because the organization performance ultimately depends on the performance of its individual employee and its sub group.
Organizational Level – Training need analysis at organizational level focuses on strategic planning, business need, and goals. It starts with the assessment of internal environment of the organization such as, procedures, structures, policies, strengths, and weaknesses and external environment such as opportunities and threats.
After doing the SWOT analysis, weaknesses can be dealt with the training interventions, while strengths can further be strengthened with continued training. Threats can be reduced by identifying the areas where training is required. And, opportunities can be exploited by balancing it against costs.
For this approach to be successful, the HR department of the company requires to be involved in strategic planning. In this planning, HR develops strategies to be sure that the employees in the organization have the required Knowledge, Skills, and Attributes (KSAs) based on the future KSAs requirements at each level.
Individual Level – Training need analysis at individual level focuses on each and every individual in the organization. At this level, the organization checks whether an employee is performing at desired level or the performance is below expectation. If the difference between the expected performance and actual performance comes out to be positive, then certainly there is a need of training.
However, individual competence can also be linked to individual need. The methods that are used to analyze the individual need are:
* Appraisal and performance review
* Peer appraisal
* Competency assessments
* Subordinate appraisal
* Client feedback
* Customer feedback
* Self-assessment or self-appraisal
Operational Level – Training Need analysis at operational level focuses on the work that is being assigned to the employees. The job analyst gathers the information on whether the job is clearly understood by an employee or not. He gathers this information through technical interview, observation, psychological test; questionnaires asking the closed ended as well as open ended questions, etc. Today, jobs are dynamic and keep changing over the time. Employees need to prepare for these changes. The job analyst also gathers information on the tasks needs to be done plus the tasks that will be required in the future.
Based on the information collected, training Need analysis (TNA) is done.
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