SWOT AnalysisA Planning and Organizing Tool
Strengths WeaknessesOpportunities Threats
Miss. Nikita Dhoot
Department of Management Studies,
DKTE’S Textiles & Engineering Institute, Ichalkaranji-Kolhapur-Maharashtra
What is SWOT Analysis ?
A systematic approach to understand the environment is the SWOT analysis. A technique that enables a group or individual to move from everyday problems and traditional strategies to a fresh perspective “Situation analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.”
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SWOT is an Acronym for :
S – Strengths
W – Weaknesses
O – Opportunities
T - Threats
Internal Environment
External Environment
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Diagrammatic Representation
Potential Resource Strengths and Competitive Capabilities
Potential Resource Weakness and
Competitive Deficiencies
A B
Potential Company Opportunities
Potential External Threats to Company’s
Well-Being
C D4
STRENGTH
“Any existing or potential resources or capability within the organisation that provides a competitive advantage in the market.”
Example:
• Strong distribution network• Intense staff commitment and loyalty• Increasing profit margin
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WEAKNESS
“Any existing or potential force which could serve as a barrier to maintain or achieve a competitive advantage in the market.”
Example:
• Lack of clear company strategy• Weak brand image and reputation• High overall unit costs
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OPPORTUNITY
“Any existing or potential force in the external environment that, if properly leveraged, could provide a competitive advantage.”
Example:• Organization's geographic location• New technology• Acquisition of rival firms
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THREAT
“Any existing or potential force in the external environment that could erode a competitive advantage.”
Example:
• A new competitor entrant • A recession and rising interest rate• Slowdown in market growth
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Aim of SWOT Analysis
1.Take advantage of strengths and opportunities
2.Minimizes weaknesses and eliminate threats
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Who needs SWOT analysis?
A. Company
• When revenue, cost and expense targets are not being
achieved
• Market share is dropping
• Industry conditions are unfavorable
• Want to launch a new business venture
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Contd…..
B. Department/ Business Unit
• When the team has not met its target;
• Customer service can be better;
• A new business unit to pursue a new business;
• A new team leader is appointed; etc
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Contd…..
C. Job Holder
• When supervisor has issues with work output;
• Assigned to a new job;
• New financial year – fresh targets;
• Job holder seeks to improve performance on the job; etc
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Significance of SWOTSWOT Analysis helps in strategic planning in following manner-1.It is a source of information for strategic planning. 2.It helps in setting of objectives for strategic planning. 3.Builds organization’s strengths. 4.Reverse its weaknesses. 5.Maximize its response to opportunities. 6.Overcome organization’s threats. 7.It helps in identifying core competencies of the firm. 8.It helps in knowing past, present and future so that by using past and current data, future plans can be chalked out.
9.SWOT analysis may be used in any decision-making
10.Guides strategists in strategy identification
11.Helps to gain competitive advantage 13
Limitations of SWOTThere are certain limitations of SWOT Analysis which are not in control of management. These include-1.Price increase; 2.Inputs/raw materials; 3.Government legislation; 4.Economic environment; 5.Searching a new market for the product which is not having overseas market due to import restrictions; etc.
Internal limitations may include- 1.Insufficient research and development facilities; 2.Faulty products due to poor quality control; 3.Poor industrial relations; 4.Lack of skilled and efficient labour; etc
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SWOT Analysis of ITC Hotels
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Strengths Weaknesses1. Strategy: differentiation strategy.2. Structure: flat, decentralized3. Skills: service skills4. Style: strong, participative culture.5. Staff: specialized, experienced, well-trained6. Shared Values: clear and well
communicated. 7. Reputation: a strong reputation
1. Strategy: clear communication reqd2. Staff: seasonal turnover requires ongoing
training and orientation of new staff. 3. Facilities: certain rooms require renovation
and upgrade
Opportunities Threats1. Market: returning growth after a period of
slump. 2. Competitors: no direct competition exists
at present, in terms of the five star 'boutique business property' niche.
3. Suppliers: strong, long-term relationships established with suppliers.
4. Guest Dependency: repeat corporate business based on personal service and quality, in a small but luxurious environment.
1. Market Entry: potential for a competitive, global brand to enter the market with a similar product.
2. Substitutes: fully furnished and serviced business apartments offering lower daily rates.
3. Economy: recovery from slight recession may take time.
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SWOT Analysis of PIZZA HUT
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Strengths Weaknesses
1. Focus on their products and services
2. Ambience & Facility
3. On-going efforts of the restaurant to provide the healthier pizza
4. Product reinvention did not stop
1. Largest users of cheese - lacks the supply of cheese.
2. High cost of production
Opportunities Threats
1. Product innovation.
2. Increase in Brand Loyalty
3. Expansion of the varieties
4. Online-ordering system.
5. Honest & real brand image
1. High competition - boost up the
needed investment
2. Concerned with their customer
satisfaction
3. Local fast food restaurants
4. Unhealthy food for children18
SWOT Analysis of WALT DISNEY
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Strengths Weaknesses
1. Strong financial background
2. Exclusive for Disney’s products
3. Well-known brand
1. Unchanged visual merchandising
2. Stores are lack of theme decoration
3. Passive staff’s attitude
Opportunities Threats
1. Solo Tour
2. Opening of Hong Kong Disneyland
1. Competition with the Disney Store
in the theme park
2. Decreasing birth rate
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Conclusion
The SWOT is a clear and easily understandable tool for presenting a
set of influencing factors and their interdependency.
It is not simply enough to identify the strengths, weaknesses,
opportunities, and threats of a company. In applying the SWOT analysis
it is necessary to minimize or avoid both weaknesses and threats.
Weaknesses should be looked at in order to convert them into
strengths. Likewise, threats should be converted into opportunities.
Lastly, strengths and opportunities should be matched to optimize the
potential of a firm.
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About MBA-DKTE……
DKTE’s Textile & Engineering Institute enjoys a unique
and prominent place amongst the institutions that are
engaged in education, training, research & consultancy.
Capitalizing on our experience and goodwill in textile
and engineering, the department of management studies
was set up. Currently it offers Two Years full time MBA
course with specialization in areas such as Marketing,
Finance, HR, Systems and Production and Textile
Management.
Document prepared by,
The Department of Management Studies, DKTES Ichalkaranji. Dist. Kolhapur. 0230-2421300
Ext. 316
Mail your valuable feedback at [email protected]
Brief Profile of The Institute
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