SWOT Analysis

Shwetank Kumar
09 ITMG 1486 IT

What is it ?
A strategic planning to evaluate

S W O T

: : : :

Strengths Weaknesses Opportunities Threats

in a project or in a business venture

SWOT
A widely used framework for organizing and using data and information gained from situation analysis Encompasses both internal and external environments One of the most effective tools in the analysis of environmental data and information

SWOT
Factors affecting an organization can usually be classified as :

Internal factors

Strengths (S) Weaknesses (W) Opportunities (O) Threats (T)

External factors

Overview

The strategy is to look at the organizations current performance (strengths and weaknesses) and factors in the external environment (opportunities and threats) that might affect the organizations future.

SWOT: internal factors

Strengths : characteristics of the business or a team that give it an advantage over others in the industry
- Positive tangible and intangible attributes, internal to an organization Weakness : characteristics that place the firm at a disadvantage relative to others - Detract the organization from its ability to attain the core goal

SWOT: external factors

Opportunity : chances to make greater profits in the environment
- External attractive factors that represent the reason for an organization to exist and develop Threats : external elements in the environment that could cause trouble for the business - External factors, beyond an organizations control, which could place the organizations mission or operation at risk

Purpose of SWOT Analysis

Help decision makers share and compare ideas Bring a clearer common purpose and understanding of factors for success

Organize the important factors linked to success and failure in the business world.
Analyze issues that have led to failure in the past Provide linearity to the decision making process allowing complex ideas to be presented systematically.

SWOT Template
SWOT Analysis
Internal Strengths Weaknesses

External Opportunities Threats

Objectives, Strategies, Policies

Objectives Specific Results that an organization seeks to achieve in pursuing the basic mission. Strategies Action Plans to undertake in response to or in anticipation of the environment to accomplish the objectives. Policies Implementing Guidelines to achieve the objectives and strategies.

Objectives, Strategies, Policies

Example:
Objective Attain 90% market share of Domestic Steel Market by 2012. Strategy Develop new products to cater to local steel fabricators.
Policy Hire marketing staff with local experience or Offer 10% discount on cash purchases for local steel fabricators.

Prioritization
Key points: Once the SWOT analysis has been completed, mark each point with:
- Things that MUST be addressed immediately - Things that can be handled now

- Things that should be researched further

- Things that should be planned for the future

The SWOT matrix

Major benefits of SWOT analyses

Simplicity Flexibility

Integration and synthesis

Collaboration Lower costs

Limitations
SWOT analysis can be very subjective. Do not rely too much on it. Two people rarely come up with the same final version of a SWOT

Use it as a guide and not as a prescription

Ways of conducting SWOT analysis

1. 2. 3. 4. 5. 6. Designate a leader or group facilitator. Designate a recorder to back up the leader if your group is large. Introduce the SWOT method and its purpose in your organization. Let all participants introduce themselves. Have each group designate a recorder; direct them to create a SWOT analysis. Reconvene the group at the agreed-upon time to share results. Discuss and record the results. Prepare a written summary of the SWOT analysis to give to participants.

6. 7.

Exercise
Assume that a car manufacturing company has recently launched its products. Perform a SWOT analysis for the same.

Eg. REVA Electric Car Company

Strengths
1) No Competition in the EV Segment. 2) Environment friendly 3) Economic to Drive (0.4 paise/Km) 4) Government subsidies (8% excise duty)

Weaknesses
1) High Price 2) Low aesthetic appeal 3) Small driving range (upto 80 KM) 4) Competition from gasoline vehicles

Opportunities
1) Huge untapped EV market 2) Growing demand of green technologies 3) Rising fuel costs 4) Growing road congestion in urban cities

Threats
1) Government incentives to gasoline vehicles 2) Entry of competitors 3) Stringent safety requirements anticipated

4) Availability of hybrid vehicles

Thank You