5 Swot Analysis & Developing Strategies and Returns

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  • 1. SWOT ANALYSIS LOOKS AT ITS SIGNIFICANCE FOR A BUSINESS
  • 2. SWOT    AN INTEGRAL PART OF STRATEGIC PLANNING – large scale/long term PEST COMES FIRST THEN THE SWOT i.e. an analysis of its internal strengths/weaknesses and the external opportunities/threats facing it
  • 3. INTERNAL - STRENGTHS        MARKET DOMINANCE STRONG ORGANISATION CORE STRENGTHS ECONOMIES OF SCALE LOW COST PRODUCTION LEADERSHIP & MANAGEMENT SKILLS FINANCIAL & CASH RESOURCES      ABILITY & AGE OF EQUIPMENT INNOVATION PROCESSES & RESULTS REPUTATION DIFFERENTIATED PRODUCTS PRODUCT/SERVIC E QUALITY
  • 4. INTERNAL - WEAKNESSES        LOW MARKET SHARE FEW CORE STRENGTHS LOW ON KEY SKILLS OLD PLANT HIGH UNIT COSTS WEAK FINANCES & POOR CASH FLOW LACKING IN MANAGEMENT & LEADERSHIP        POOR INNOVATION RECORD LACK OF NEW IDEAS WEAK ORGANISATION LOW QUALITY POOR REPUTATION UNDIFFERENTIATED PRODUCTS DEPENDANT ON FEW
  • 5. EXTERNAL OPPORTUNITIES         NEW MARKETS/SEGMENTS  NEW PRODUCTS DIVERSIFICATION OPPORTUNITIES  MARKET GROWTH COMPETITOR WEAKNESS STRATEGIC SPACE DEMOGRAPHIC & SOCIAL CHANGE ECONOMIC/POLITIC AL CHANGE TAKEOVER/MERGER OR PARTNERSHIP OPPORTUNITIES INTERNATIONAL GROWTH
  • 6. EXTERNAL - THREATS       NEW MARKET ENTRANTS INCREASED COMPETITION MORE PRESSURE FROM EXTERNAL STAKEHOLDERS SUBSTITUTES LOW MARKET GROWTH DOWNTURN IN ECONOMIC CYCLE     TECHNOLOGICAL THREAT ECON & POLITICAL CHANGE DEMOGRAPHIC & SOCIAL CHANGE NEW BARRIERS TO TRADE - international
  • 7. SWOT       KEEP IT BRIEF, BE REALISTIC, DON’T LIST RELATE S & W TO KEY INDUSTRY SUCCESS FACTORS STATE S & W IN COMPETITIVE TERMS e.g. better than competition SPECIFIC STATEMENTS ANALYSIS – distinguish between where firm is now and where it wishes to be DON’T ASSUME ITS CORRECT
  • 8. DEVELOPING STRATEGIES & RETURNS FOR THE MEDIUM TERM (3-5 years) HERE THE AIM IS TO GENERATE SUCCESSFUL RESULTS
  • 9. COMPETITIVE STRATEGIES 1. HEAD ON AGAINST THE MARKET LEADER e.g. attack where the leader is weak 2. MARKET SEGMENTATION e.g. choose a segment where the leader has weaker advertising 3. DIVERSIFICATION – into related or unrelated markets 4. GUERRILLA i.e. to gain a short term profit e.g. short term cut in price on small range of products
  • 10. INNOVATORY STRATEGIES 1. REWRITE THE RULES OF THE GAME e.g. online music v traditional purchasing 2. TECHNOLOGICAL e.g. Apple and innovation 3. HIGHER SERVICE LEVELS e.g. personal service 4. CO-OPERATION e.g. Sky and the Premier League
  • 11. PORTER STRATEGIES 1. 2. 3. COST LEADERSHIP – doesn’t necessarily mean low price DIFFERENTIATION – from competitors products/services – via market segmentation FOCUS – niche products – could be cost focus or differentiation focus
  • 12. THE GROWTH-SHARE MATRIX High market growth rate Low market growth rate STAR CASH COW High relative market share PROBLEM CHILD DOG Low relative market share
  • 13. DIRECTIONAL POLICY MATRIX INDUSTRY ATTRACTIVENESS HIGH MEDIUM Strong Business Competitive Position Medium Weak LOW
  • 14. OTHER METHODS      MERGER/TAKEOVER DEMERGER JOINT VENTURES FRANCHISE WITHDRAW
  • 15. INTERNATIONALISE 1. 2. 1. 2. CRUCIAL DUE TO GROWTH OF WORLD TRADE GLOBALISATION OF THE WORLD ECONOMY KEY METHODS INTERNATIONAL MULTINATIONAL
  • 16. FACTORS INFLUENCING DECISION         INCENTIVES - Host  BARGAINING POWER  RESOURCE  AVAILABILITY RESOURCE QUALITY  RESOURCE COSTS  PLC STAGE IN HOST  PER CAPITA INCOME  LEVELS  COMPETITION LEVEL OF CONSUMERISM TRADE BARRIERS ECONOMIC STABILITY INFRASTRUCTURE LANGUAGE CULTURE TECHNOLOGY CLIMATE