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SWOT Analysis
Strategic Management
Prepared By
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Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
SWOT Analysis
• A scan of the internal and
external environment is an
important part of the
strategic planning process.
Environmental factors
internal to the firm usually
can be classified as
strengths (S) or weaknesses
(W), and those external to
the firm can be classified as
opportunities (O) or threats
(T).
SWOT Analysis
• Such an analysis of the
strategic environment is
referred to as a SWOT
analysis. The SWOT
analysis provides
information that is helpful
in matching the firm's
resources and capabilities
to the competitive
environment in which it
operates.
SWOT Analysis
Strengths
• A firm's strengths are its resources
and capabilities that can be used as
a basis for developing a competitive
advantage. Examples of such
strengths include:
– patents
– strong brand names
– good reputation among customers
– cost advantages from proprietary
know-how
– exclusive access to high grade
natural resources
– favorable access to distribution
networks
Weaknesses
• The absence of certain
strengths may be viewed as a
weakness. For example, each
of the following may be
considered weaknesses:
– lack of patent protection
– a weak brand name
– poor reputation among
customers
– high cost structure
– lack of access to the best
natural resources
– lack of access to key
distribution channels
Weaknesses
• In some cases, a weakness may
be the flip side of a strength.
Take the case in which a firm
has a large amount of
manufacturing capacity. While
this capacity may be considered
a strength that competitors do
not share, it also may be a
considered a weakness if the
large investment in
manufacturing capacity
prevents the firm from reacting
quickly to changes in the
strategic environment.
Opportunities
• The external environmental
analysis may reveal certain
new opportunities for profit
and growth. Some examples
of such opportunities
include:
– an unfulfilled customer need
– arrival of new technologies
– loosening of regulations
– removal of international
trade barriers
Threats
• Changes in the external
environmental also may
present threats to the
firm. Some examples of
such threats include:
– shifts in consumer tastes
away from the firm's
products
– emergence of substitute
products
– new regulations
– increased trade barriers
The SWOT Matrix
The SWOT Matrix
• A firm should not
necessarily pursue the
more lucrative
opportunities. Rather, it
may have a better chance
at developing a
competitive advantage by
identifying a fit between
the firm's strengths and
upcoming opportunities.
The SWOT Matrix
• In some cases, the firm
can overcome a weakness
in order to prepare itself
to pursue a compelling
opportunity. To develop
strategies that take into
account the SWOT profile,
a matrix of these factors
can be constructed.
The SWOT Matrix
• The SWOT matrix is shown below:
– S-O strategies pursue opportunities
that are a good fit to the company's
strengths.
– W-O strategies overcome
weaknesses to pursue
opportunities.
– S-T strategies identify ways that the
firm can use its strengths to reduce
its vulnerability to external threats.
– W-T strategies establish a defensive
plan to prevent the firm's
weaknesses from making it highly
susceptible to external threats.
SWOT analysis -  strategic management - Manu Melwin Joy

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SWOT analysis - strategic management - Manu Melwin Joy

  • 2. Prepared By Kindly restrict the use of slides for personal purpose. Please seek permission to reproduce the same in public forms and presentations. Manu Melwin Joy Assistant Professor Ilahia School of Management Studies Kerala, India. Phone – 9744551114 Mail – manu_melwinjoy@yahoo.com
  • 3. SWOT Analysis • A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T).
  • 4. SWOT Analysis • Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates.
  • 6. Strengths • A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include: – patents – strong brand names – good reputation among customers – cost advantages from proprietary know-how – exclusive access to high grade natural resources – favorable access to distribution networks
  • 7. Weaknesses • The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses: – lack of patent protection – a weak brand name – poor reputation among customers – high cost structure – lack of access to the best natural resources – lack of access to key distribution channels
  • 8. Weaknesses • In some cases, a weakness may be the flip side of a strength. Take the case in which a firm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.
  • 9. Opportunities • The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include: – an unfulfilled customer need – arrival of new technologies – loosening of regulations – removal of international trade barriers
  • 10. Threats • Changes in the external environmental also may present threats to the firm. Some examples of such threats include: – shifts in consumer tastes away from the firm's products – emergence of substitute products – new regulations – increased trade barriers
  • 12. The SWOT Matrix • A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities.
  • 13. The SWOT Matrix • In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity. To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed.
  • 14. The SWOT Matrix • The SWOT matrix is shown below: – S-O strategies pursue opportunities that are a good fit to the company's strengths. – W-O strategies overcome weaknesses to pursue opportunities. – S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. – W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats.