SWOT Analysis By Mohriz Shahid Syed

Entrepreneurship Assignment By

Mohriz Syed (BSEE13003)

SWOT ANALYSIS

History

In 1960’s Albert Humphrey conducted a research to find the cause Why new organizations are failed in the market?

What are factors why existing organizations could not maximize profit?

Result of research :

They found four major factors for failure. Good and Bad in Present and future

Developed an Analysis Technique named “SOFT Analysis”

S for Satisfactory in present

O for Opportunity in the future

F for Faults in the present

T for Threats in the future

SWOT ANALYSIS

History

After That in 1964 Concept of SWOT came

What is SWOT? SWOT Analysis stands for Strengths, Weakness, Opportunities and

Threats that a startup or business faces at a time.

Helpful to achieve the objectives Harmful in achieving objectives

Strengths in Present Weakness In Future

Opportunities in Present Threats In Future

Purpose of the SWOT Analysis

Determining the factors to maximize the profit

Steps for the analysis

Step 1-Identify your Strengths and Weakness within the organization

Step 2-Identify the Threats and opportunities outside the organization

picture

How to do Analysis

Step 1- Determine your strengths and Weakness

STRENGTHS AND WEAKNESS: refers to as competitive advantage or disadvantages

Question should be consider during determining the strengths and weakness of organizations. In which product you are best from your competitors?

What are the unique capital you have that others don’t?

Is there any Technological advancement that you have and others don’t?

Do you have good leadership who make good decisions?

Do you have any talent that others don’t have?

Good Brand

How to do analysis

Step 2-Identify the Threats and opportunities

Opportunities :We have to Determine

How to raise finance for your business?

Which of your product people like?

How to capture the market by defeating your competitors?

Threats: We have to determine

What are your competitors doing well than you?

Have there any trend changed in the market?

Are you innovating your product as the trend changes or not?

Advantages

It is a good tool which helps in organizing firms by knowing the strengths and weakness of the firm.

It aware us from our competitors.

Helps in making good decisions by knowing opportunities and threats.

Equally applicable on big firms, startups and for individuals.

Enhance analytical abilities of employees and employers.

Limitations

Gives us analyzing techniques but not the solutions.

Not give us idea which issue is more harmful for firm i.e. which issue should have more priority

Utility

To decide a direction of an organization (i.e. What that organization wants to do ?)

To analyze performance of employee to improve its performance.

For the assessment of its product or service.

To make fruitful strategies against its competitors.

To make future plan of its organization.

As a whole To find out best way to make strategies and future plan of development of its organization and increase its performance to make revenue in market.

Porter’s Five Forces

HISTORY

While SWOT analysis have advantages but it could not totally solve the problems as they are not more concern about competitions.

To solve the problem Michael Porter gave a theory named porters five forces. He worked for Harvard Business School there he with his team established strategies for competitive markets.

He used principles of Economics to analyze the competitive market and proposed “Porter’s five forces” which are useful in maximizing the profit. He gave the concept of competitive advantage and disadvantage

.

Introduction

What are Porter Five Forces

Poster 5 forces

Threats of new entrants

Threats of substitute

Bargaining Power Suppliers

Buyers Power

Competitive Rivalry

Purpose

As SWOT analysis already enables us to find our strengths and opportunities , But could not told us how to avail these opportunities and how to turn our weakness into strengths. Porters five forces enables us to do these things.

Competitive Rivalry Competitive advantage analysis enables us how to maximize our profit by specializing.

Buyers Power It tells us how to engage your customers towards your Brand by knowing the trends.

Threats of substitute How to survive in the market while good substitutes are present in the market.

Advantages

As Every firm wants profits so by applying porters five forces firms can maximize their profits.

It is a good tool which helps us in surviving in the competitive market.

It gives us a solution how to make competition with your competitors.

Solved the problems which SWOT analysis faces, by giving us tools to solve the problems.

Enhance analytical abilities of employees and employers.

Limitations

It is not too much simple as SWOT analysis was.

It requires more analysis and expertise.

It is time consuming and expensive.

Sometimes it is very difficult to apply this theory in complex competitive market where a lot of substitutes are present.

It works for only Ideal market where ups and down are not occur in the market.

Utility

Analyze present situation of your industry and yours rivals.

To make its position strong in market.

We can avail more from its strong points and can also improve our weak points.

We can also find out different options about our industry by doing option analysis using these five forces.

PEST Analysis

History & Creation of PEST Analysis

In 1967 ,Aguilar, a Harvard professor, gave the idea of ‘ETPS’

ETPS stands for Economical, Technological, Political and Social

In 1980 it is recognized as “PEST”.

Purpose

Since now we are analyzing micro economical factors but in PEST analysis we observe the macro circumstances in which a firm can work

This analysis gives a brief information about Political, Social and economical environment which are beneficial for us.

Helps us in making a good decision in such political situations where we have no control.

How to sustain in advanced market using technology and innovation.

Advantages

Helps an organization to start a new product i.e. is this product is compatible with culture.

Helps in making new firms i.e. which firm is best and beneficial according to environment.

According to environment, It warns us about the threats which a firm could face in future.

As an investor, It helps you in which business investment is better and why.

Limitations

For this analysis to perform, We need expertise and analyst who could perform analysis.

Time consuming and expensive

We have to know about the history of culture and people.

Geography also matters in this analysis.

Uncertainty is very high in this analysis as we can only predict the future only according to our knowledge and by history. Something could happen which is not happened in the history.

Utility

Pest analysis can be used in any environment to get political, social, technological and economical information about that environment.

SWOT analysis only be completed in a very good way when PEST analysis is merged with it.

It is beneficial for every type of business working in the specific environment.

Value chain Analysis

History

Michael Porter gave concept of Value chain in 1980.

In 1990s Gereffi introduced “Chains Concept” : It is a bridge between households and market

Morvan (1985s)

Mesco-economy also said economy is interdependence. Technology etc different factors that affect economy also depends upon value

Introduction

An analysis to increase value of product in the front of your customer.

It is based on three steps 1st which product or service your industry is going to introduce in

market?

2nd what will be proper price?

3rd how to plan all these things

Purpose

This model is used

To Provide great value to your costumers by applying value chain theory.

To Get maximum profit.

Using providing techniques, analyze the better way of getting profits.

Using comparative advantage techniques maximizing your and costumers benefits.

To enhance public relationship of your brand

Advantages

It provides help for every type of business.

Comparative advantage and disadvantage analysis provides us the key to success and maximization of profit.

Using this strategy, firms decides about their future and beneficial products.

It is useful to utilize your capital in a better way.

Disadvantages

Analysis is very difficult, as data collection is very tough in this analysis.

It is expensive as it requires more expertise and data collecting skills.

To apply this analysis data should be in a specific orientation and organization.

Utility

Utilized for marketing your product or service that you are going to introduce in market.

Utilized for maximize profit and increase revenue.

Utilized for making your customer’s faith strength more.

Utilized for making strategies about your competitor.

References / Sources

Cite Man: What are the benefits of value chain management?

http://www.kstoolkit.org/Porter%27s+Five+Forces+Analysis

http://www.tutor2u.net/business/reference/value-chain-analysis

http://www.free-management-ebooks.com/faqst/pestle-09.htm

https://www.mindtools.com/pages/article/newSTR_66.htm

http://www.differentiateyourbusiness.co.uk/the-advantages-disadvantages-of-value-chain-analysis

http://managerial-accounting.blogspot.com/2012/10/limitations-of-value-chain-analysis.html

SWOT Analysis - Idea, Methodology and a Practical Approach; Nadine Pahl and Anne Richter

https://www.mindtools.com/pages/article/newTMC_09.htm