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SWOT analysis A widely used framework for organizing and using data and information gained from situation analysis One of the most effective tools in the analysis of environmental data and information A SWOT analysis generates information that is helpful in matching an organization’s or a group’s goals, programs, and capacities to the social environment in which they operate
Cont……… It is an instrument within strategic planning Encompasses both internal and external environments
SWOT• Factors affecting an organization can usually be classified as:• Internal factors – Strengths (S) – Weaknesses (W) Strengths Weaknesses• External factors – Opportunities (O) – Threats (T) Opportunities Threats
SWOT: internal factors Strengths Positive tangible and intangible attributes, internal to an organization. They are within the organization’s control Beneficial aspect of the organization or the capabilities of an organization, which includes human competencies, process capabilities. Financial resources, product and services, customer goodwill and brand loyalty
SWOT: internal factors Strength are good for the company to take competitive advantage from the market. Strengths are important to provide extra energy to compete in the market is relation to the competitors
SWOT: internal factors cont.... Example – Well-know brand name – Lower cost ( raw materials or process) – Better marketing skill – Committed employee – Price, value, quality
SWOT: internal factorsWeakness Weakness arise due to a lack of important skills and expertise, physical and weak competitive capabilities in key areas Factors that are within an organization’s control that detract from its ability to attain the core goal. In which areas might the organization improve? Characteristic that place the firm at a disadvantage relative to others.
SWOT: internal factors cont.... Detract the organization from its ability to attain the core goal and influence its growth Weakness are the factors which do not meet the standards we feel they should meet, however weakness are controllable. The must be minimized and eliminated
SWOT: internal factors cont.... Examples Limited distribution Higher cost Out of date product / technology Poor marketing skill Limited management skills
SWOT: external factors Opportunities Opportunity is a situation where a company will gain something by planning and exploiting its resources strategically Arise when an organization can take benefit of conditions in its environment to plan and execute strategic that enable it to become more profitable Every firm has to use its internal resources strategically to get the opportunity from the external environment
SWOT: external factors cont.... Chance to make greater profits in the environment –external attractive factor that represent the reason for an organization to exist and develop Organization should be careful and recognize the opportunity may arise, opportunities may arise from market, competition, internet/ government/ technology
SWOT: external factors cont.... Examples Rapid market Rival firms are complacent Changing customer needs/wants New users of product discover Technology development and innovation Market response to tactics, e.g., surprise
SWOT: external factors cont.... Threats Threats represent an unfavorable situation for a company restraining to compete and make profits Situation arise when there is an increasing number of competing firms in the industry, slow pace of market growth, increasing bargaining power of the supplier or customers etc..
SWOT: external factors cont.... External elements in the environment that could cause trouble for the business-external factors, beyond an organization control which could place the organization mission or operation at risk Threats are uncontrollable, when a threat comes the stability and survival can ne at stake Classify them by their “seriousness” and “probability of occurrence
SWOT: external factors cont.... Examples Entry of foreign competitors Introduction of new substitute products Product life cycle in decline Increased government regulation Political effects New technologies, services, ideas