2. SWOT ANALYSIS
A traditional approach to internal analysis:
SWOT is an acronym for the internal Strengths and
Weaknesses of a firm and the environmental
Opportunities and Threats facing that firm.
SWOT analysis is a historically popular technique
through which managers create a quick overview of a
company’s strategic situation.
3. SWOT COMPONENTS
An opportunity is a major favorable situation in a firm’s
environment
A threat is a major unfavorable situation in a firm’s
environment
A strength is a resource or capability controlled by or
available to a firm that gives it an advantage relative to its
competitors in meeting the needs of the customers it serves
A weakness is a limitation or deficiency in one or more of a
firm’s resources or capabilities relative to its competitors that
create a disadvantage in effectively meeting customer needs
5. LIMITATIONS OF SWOT ANALYSIS
A SWOT analysis can overemphasize internal
strengths and downplay external threats
A SWOT analysis can be static and can risk ignoring
changing circumstances
A SWOT analysis can overemphasize a single
strength or element of strategy
A strength is not necessarily a source of competitive
advantage
7. PORTFOLIO OR BCG OR GROWTH-SHARE
MATRIX
A portfolio matrix is a chart used to define products
in terms of both the growth in their industry and
their specific market share.
8. Growth share matrix is a portfolio planning method that
evaluates a company’s products in terms of their market
growth rate and relative share.
Products are classified as: Stars, Cash Cows, Question
marks and Dogs
The BCG Matrix
10. Stars are high-growth, high-share businesses or products requiring heavy
investment to finance rapid growth. They will eventually turn into cash
cows.
Cash cows are low-growth, high-share businesses or products that are
established; require less investment to maintain market share in a stable
market.
Question marks are low-share business units in high-growth markets
requiring a lot of cash to hold their share.
Dogs are low-growth, low-share businesses and products that may
generate enough cash to maintain themselves but do not promise to be
large sources of cash. Not worth much investment.
11. Problems with Matrix Approaches
Difficulty in measuring market share
and growth
Time consuming
Expensive
Focus on current businesses, not future
planning
The BCG Matrix
13. ORGANIZATIONAL STRUCTURE
Chain of Command
The continuous line of authority that extends from upper
levels of an organization to the lowest levels of the
organization and clarifies who reports to whom
18. Line and Staff Authority
Line managers have the authority to issue orders to those in
the chain of command
Staff managers have advisory authority, and cannot issue
orders to those in the chain of command (except those in their
own department)
