SWOT ANALYSIS
LOOKS AT ITS SIGNIFICANCE
FOR A BUSINESS
SWOT





AN INTEGRAL PART OF STRATEGIC
PLANNING – large scale/long term
PEST COMES FIRST
THEN THE SWOT
i.e. an analysi...
INTERNAL - STRENGTHS









MARKET DOMINANCE
STRONG ORGANISATION
CORE STRENGTHS
ECONOMIES OF SCALE
LOW COST PRODU...
INTERNAL - WEAKNESSES









LOW MARKET SHARE
FEW CORE STRENGTHS
LOW ON KEY SKILLS
OLD PLANT
HIGH UNIT COSTS
WEAK...
EXTERNAL OPPORTUNITIES











NEW
MARKETS/SEGMENTS

NEW PRODUCTS
DIVERSIFICATION
OPPORTUNITIES

MARKET GROWT...
EXTERNAL - THREATS









NEW MARKET ENTRANTS
INCREASED
COMPETITION
MORE PRESSURE FROM
EXTERNAL
STAKEHOLDERS
SUBST...
SWOT










KEEP IT BRIEF, BE REALISTIC, DON’T LIST
RELATE S & W TO KEY INDUSTRY
SUCCESS FACTORS
STATE S & W IN C...
DEVELOPING STRATEGIES &
RETURNS FOR THE MEDIUM
TERM (3-5 years)
HERE THE AIM IS TO
GENERATE SUCCESSFUL
RESULTS
COMPETITIVE STRATEGIES
1. HEAD ON AGAINST THE MARKET LEADER
e.g. attack where the leader is weak
2. MARKET SEGMENTATION
e....
INNOVATORY STRATEGIES
1. REWRITE THE RULES OF THE GAME
e.g. online music v traditional purchasing
2. TECHNOLOGICAL
e.g. Ap...
PORTER STRATEGIES
1.

2.

3.

COST LEADERSHIP – doesn’t necessarily
mean low price
DIFFERENTIATION – from competitors
prod...
THE GROWTH-SHARE
MATRIX
High market
growth rate

Low market
growth rate

STAR

CASH
COW

High relative market share

PROBL...
DIRECTIONAL POLICY
MATRIX
INDUSTRY
ATTRACTIVENESS
HIGH MEDIUM
Strong

Business
Competitive
Position

Medium
Weak

LOW
OTHER METHODS






MERGER/TAKEOVER
DEMERGER
JOINT VENTURES
FRANCHISE
WITHDRAW
INTERNATIONALISE
1.
2.

1.
2.

CRUCIAL DUE TO
GROWTH OF WORLD TRADE
GLOBALISATION OF THE WORLD
ECONOMY
KEY METHODS
INTERNA...
FACTORS INFLUENCING
DECISION











INCENTIVES - Host 
BARGAINING POWER

RESOURCE

AVAILABILITY
RESOURCE QU...
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5 Swot Analysis & Developing Strategies and Returns

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5 Swot Analysis & Developing Strategies and Returns

  1. 1. SWOT ANALYSIS LOOKS AT ITS SIGNIFICANCE FOR A BUSINESS
  2. 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. 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. 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. 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. 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. 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. 8. DEVELOPING STRATEGIES & RETURNS FOR THE MEDIUM TERM (3-5 years) HERE THE AIM IS TO GENERATE SUCCESSFUL RESULTS
  9. 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. 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. 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. 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. 13. DIRECTIONAL POLICY MATRIX INDUSTRY ATTRACTIVENESS HIGH MEDIUM Strong Business Competitive Position Medium Weak LOW
  14. 14. OTHER METHODS      MERGER/TAKEOVER DEMERGER JOINT VENTURES FRANCHISE WITHDRAW
  15. 15. INTERNATIONALISE 1. 2. 1. 2. CRUCIAL DUE TO GROWTH OF WORLD TRADE GLOBALISATION OF THE WORLD ECONOMY KEY METHODS INTERNATIONAL MULTINATIONAL
  16. 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

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