This document discusses SWOT analysis and its significance for business strategic planning. It explains that SWOT analysis involves analyzing a business's internal strengths and weaknesses as well as external opportunities and threats. It provides examples of various internal strengths and weaknesses and external opportunities and threats that a business may consider in its SWOT analysis. The document also discusses how businesses can develop strategies based on their SWOT analysis to achieve medium-term success over 3-5 years.

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
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MARKET DOMINANCE
STRONG ORGANISATION
CORE STRENGTHS
ECONOMIES OF SCALE
LOW COST PRODUCTION
LEADERSHIP &
MANAGEMENT SKILLS
FINANCIAL & CASH
RESOURCES


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ABILITY & AGE OF
EQUIPMENT
INNOVATION
PROCESSES &
RESULTS
REPUTATION
DIFFERENTIATED
PRODUCTS
PRODUCT/SERVIC
E QUALITY

4. INTERNAL - WEAKNESSES

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LOW MARKET SHARE
FEW CORE STRENGTHS
LOW ON KEY SKILLS
OLD PLANT
HIGH UNIT COSTS
WEAK FINANCES &
POOR CASH FLOW
LACKING IN
MANAGEMENT &
LEADERSHIP

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POOR INNOVATION
RECORD
LACK OF NEW IDEAS
WEAK
ORGANISATION
LOW QUALITY
POOR REPUTATION
UNDIFFERENTIATED
PRODUCTS
DEPENDANT ON
FEW

5. EXTERNAL OPPORTUNITIES

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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

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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
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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
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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