Globus SWOT Analysis

OBJECTIVE:
IDENTIFYVARIOUS FORCES/ ELEMENT
OFTHE FIRM’S ENVIRONMENT.

Copyright © 2004 Prentice Hall, Inc. All rights reserved. 1–4
EXHIBIT HM–4

 – the sum of all the elements and
forces present in its immediate and
remote surroundings which have a
potential impact on its ability to
achieve its objectives.

 Internally, an organization can be viewed
as a resource conversion machine that
takes inputs (labor, money, materials and
equipment) from the external environment
(i.e., the outside world), converts them into
useful products, goods, and services, and
makes them available to customers as
outputs.

 The second level of the management system
involves the organization's external
environment. It consists of all the outside
institutions and forces that have an actual or
potential interest or impact on the
organization's ability to achieve its
objectives: competitive, economic,
technological, political, legal, demographic,
cultural, and ecosystem.
External Environment
The second level of the management system involves the organization's external environment. It consists of all the outside institutions and fo
The second level of the management system involves the organization's external environment. It consists of all the outside institutions and fo

 PEST analysis stands for "Political, Economic, Social, and
Technological analysis“
 Framework of macro-environmental factors used in the
environmental scanning component of strategic
management.
 Some analysts added Legal and rearranged the mnemonic to
SLEPT, inserting Environmental factors expanded it to
PESTEL or PESTLE, which is popular in the UK.
11/25/2022 9

The model has recently been further extended to
STEEPLE and STEEPLED, adding education and
demographic factors.
It is a part of the external analysis when conducting a
strategic analysis or doing market research, and gives
an overview of the different macro environmental
factors that the company has to take into
consideration.
It is a useful strategic tool for understanding market
growth or decline, business position, potential and
direction for operations.

Globus Inc.
is a leading
manufacturer
of baby
products.
It has decided to venture
into the market of
cosmetics with the launch
of a new brand of
cosmetics ‘Glaze’ in the
market.
However, before Globus can actually
make the final decision of venturing
into a new market, it needs to find
out the things that are working in its
favor and the aspects that can lead to
the failure of its new venture.

Globus can do
a SWOT
Analysis of its
position in the
market.
Carrying out a SWOT
Analysis will help Globus
understand the company’s
strengths, weaknesses,
opportunities and threats.
SWOT Analysis would help Globus
understand its strengths that would be
helpful in the new venture, its
weaknesses that need to be overcome
to be successful in launching the new
products, the opportunities that it has
at hand to succeed in the new venture
and the threats that it perceives to the
success in the new venture.

Introduction
Globus can do
a SWOT
Analysis of its
position in the
market.
Carrying out a SWOT
Analysis will help Globus
understand the company’s
strengths, weaknesses,
opportunities and threats.
SWOT Analysis would help Globus
understand its strengths that would be
helpful in the new venture, its
weaknesses that need to be overcome
to be successful in launching the new
products, the opportunities that it has
at hand to succeed in the new venture
and the threats that it perceives to the
success in the new venture.

What is SWOT Analysis?
SWOT Analysis is a technique founded by Albert Humphrey who led a research
project at Stanford University in the 1960s and 1970s.
The acronym ‘SWOT’ stands for:
S W
O T

SWOT Analysis
S W O T
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SWOT
Analysis
Oppurtunity
Threats
Strengths
Weaknes
s
Acronym for Strengths,
Weaknesses, Opportunities,
and Threats.
Technique is credited to Albert
Humphrey who led a research
project at Stanford University
in the 1960s and 1970s.
Planning tool used to
understand Strengths,
Weaknesses, Opportunities, &
Threats involved in a project /
business.
Used as framework for
organizing and using data
and information gained from
situation analysis of internal
and external environment.
Technique that enables a
group / individual to move from
everyday problems / traditional
strategies to a fresh
perspective.

Strengths
S W
O T
W
O T
Strengths are:
• Characteristics of the business or team
that give it an advantage over others in
the industry.
• Positive, tangible and intangible
attributes, internal to an organization.
• Beneficial aspects of the organization
or the capabilities of an organization,
which includes human competencies,
process capabilities, financial resources,
products and services, customer
goodwill and brand loyalty.

WEAKNESSES
Characteristics that place the firm at a
disadvantage relative to others.
Detract the organization from its
ability to attain the core goal and
influence its growth.
Weaknesses are the factors which
do not meet the standards we feel
they should meet. However,
weaknesses are controllable. They
must be minimized and eliminated.
Examples - Limited financial
resources, Weak spending on R & D,
Very narrow product line, Limited
distribution, Higher costs, Out-of-date
products / technology, Weak market
image, Poor marketing skills, Limited
management skills, Under-trained
employees.

OPPORTUNITIES
Chances to make greater profits in the
environment - External attractive
factors that represent the reason for an
organization to exist & develop.
Arise when an organization can
take benefit of conditions in its
environment to plan and execute
strategies that enable it to become
more profitable.
Organization should be careful and
recognize the opportunities and grasp
them whenever they arise.
Opportunities may arise from market,
competition, industry/government and
technology.
Examples - Rapid market growth,
Rival firms are complacent, Changing
customer needs/tastes, New uses for
product discovered, Economic boom,
Government deregulation, Sales
decline for a substitute product .

SWOT ANALYSIS - THREAT
!
THREATS
External elements in the environment that could
cause trouble for the business - External factors,
beyond an organization’s control, which could
place the organization’s mission or operation at
risk.
Arise when conditions in external
environment jeopardize the
reliability and profitability of the
organization’s business.
Compound the vulnerability when they
relate to the weaknesses. Threats are
uncontrollable. When a threat comes,
the stability and survival can be at
stake.
Examples - Entry of foreign
competitors, Introduction of new
substitute products, Product life cycle
in decline, Changing customer
needs/tastes, Rival firms adopt new
strategies, Increased government
regulation, Economic downturn.

S W
T
O
To help decision makers share and
compare ideas.
To bring a clearer common purpose
and understanding of factors for
success.
To organize the important factors
linked to success and failure in the
business world.
To analyze issues that have led
to failure in the past.
Aim of SWOT Analysis?
To provide linearity to the
decision making process allowing
complex ideas to be presented
systematically.

Workshop
Sessions
Brainstorming
Meetings
Strategic
Planning
Product
Evaluation
Competitor
Evaluation
Personal Development
Planning
Decision
Making
Product Launch
Changing Jobs
Who needs SWOT Analysis?
SWOT Analysis is also
required for / during...

Tip
Matching and converting is one way of utilizing SWOT.
‘Matching’ is used to find
competitive advantages by
matching the strengths to
opportunities.
‘Converting’ is to apply
conversion strategies to
convert weaknesses or
threats into strengths or
opportunities.
Finding new markets is an
example of a conversion
strategy.
Moreover, if the threats or
weaknesses cannot be
converted, then an
organization should try to
minimize or avoid them.

Steps of SWOT Analysis
Perform SWOT Analysis & Document:
This step includes the following:
1. Establish the objectives
2. Select contributors
3. Allocate research & information
gathering tasks
4. Create a workshop environment
5. List SWOT Analysis
6. Evaluate listed ideas againstObjectives
7. Carry your findings forward
Let us look at each in detail.
Perform SWOT Analysis
& Document
Analyze Internal &
Prepare Action Plans
Perform SWOT Analysis
& Document

Searching
extensively
for
competitors
Effective SWOT Analysis
Searching Extensively for Competitors:
• It is critical for conducting an effective SWOT Analysis that
you do not overlook any competitor, both current as well
as future competitors.
• You should consider all competitors including the
following:
o Product competitors
o Generic competitors
o Total budget competitors

Tips & Exercise
EXAMPLE
Mc Donald’s SWOT Analysis

WEAKNESSES
• Failing pizza test market thus limiting the
ability to compete with pizza providers.
• High training costs due to high turnover.
• Minimal concentration on organic foods.
• Not much variation in seasonal products .
• Quality concerns due to franchised operations.
• Focus on burgers / fried foods not on healthier
options for their customers.
• Ranks very high on the Fortune Magazine's
most admired list
• Community oriented
• Global operations all over the world
• Cultural diversity in the foods
• Excellent location
• Assembly line operations.
• Use of top quality products
STRENGTHS
INTERNAL
• Marketing strategies that entice people from
small children to adults.
• Lawsuits for offering unhealthy foods.
• Contamination risks that include the threat of
e-coli containments.
• The vast amount of fast food restaurants that
are open as competition.
• Focus on healthier dieting by consumers.
• Down turn in economy affecting the ability to
eat
that much.
THREATS
• Opening more joint ventures.
• Being more responsive to healthier options.
• Advertising wifi services in the branches.
• Expanding on the advertising on being
more socially responsible
• Expansions of business into newly developed
parts of the world.
• Open products up to
allergen free options
such as peanut free.
OPPORTUNITIES
EXTERNAL
Tips & Exercise
Mc Donald’s
SWOT Analysis

OBJECTIVE:
Describe the local and
international business
environment of a firm

What is the role of business in
the environment, and how the
environment affects the firm

 Business is hugely important in a country’s
economy because it is the main economic
engine for the country.
 Businesses are a very important part of the
circular flow of any market economy. They buy
resources from households in the resource
market and sell to households in the product
market. This makes them indispensable to the
economy.

Businesses also allow the economy to work
more efficiently.
When businesses compete with one
another, they improve their efficiency
and help the economy grow.
They also help the economy growth through
innovations of various sorts. No market
economy can thrive without businesses

33
 Domestic business: a business that
acquires all its resources and sells its
products or services within a single
country.
 International business: a business
that is primarily based in a single
country but acquires some
meaningful share of its resources or
revenues (or both) from other
countries.

34
 Multinational business: one that has a
worldwide marketplace from which it
buys raw materials, borrows money,
and manufactures its products and to
which it subsequently sells its products.
 Global business: a business that
transcend national boundaries and is
not committed to a single home
country.

35
 Exporting: making a product in the firm’s domestic
marketplace and selling it in another country.
 Importing: bringing a good, service, or capital into the
home country from abroad.
 Licensing: an arrangement whereby a firm allows
another company to use its brand name, trademark,
technology, patent, copyright, or other assets in
exchange for a royalty based on sales.

36
 Strategic alliance: a cooperative
arrangement between two or more
firms for mutual gain.
 Joint venture: a special type of
strategic alliance in which the partners
share ownership of a new enterprise.

37
 Direct investment: when a firm headquartered
in one country builds or purchases operating
facilities or subsidiaries in a foreign country.

1.What is the role of the firm’s
environment in the life of the
student?
2.What contributions student
may extend to help our
environment healthy?

Describes the following business:
 1. Domestic business
 2 Multinational business
 3. Global business
Rubrics:
Content 5
Org. 5
Relevance 5
15

 What are the legal forms of
business

41
 Government stability is important to
managers seeking international
opportunities. No business wants to set up
shop in a foreign market only to see its
investment disappear in the face of
government nationalization or civil unrest.

43
 Government stability is important to
managers seeking international
opportunities.
 No business wants to set up shop in a foreign
market only to see its investment disappear
in the face of government nationalization or
civil unrest.

 The definition of economic development
given by MichaelTodaro
 is an increase in living standards,
improvement in self-esteem needs and
freedom from oppression as well as a greater
choice.

 The most accurate method of measuring
development is theHuman Development
Index which takes into account the literacy
rates & life expectancy
which affect productivity and could lead to
Economic Growth.
 It also leads to the creation of more
opportunities in the sectors of education,
healthcare, employment and the conservation
of the environment.It implies an increase in
the per capita income of every citizen.

SingleProprietorship
Partnership
Corporation
Cooperatives

 Differentiate the legal forms of
business

A sole proprietorship is owned and run
by one individual who receives all
profits and has unlimited responsibility
for all losses and debts.
/

 Filing taxes as a sole proprietorship is relatively
easier than that of a corporation.
 Sole proprietorships typically require
less capital to set up and have easier payroll
requirements.
 Sole proprietorships are not as heavily
regulated as other forms of organizations.


 The owner of a sole proprietorship is solely liable
for all debts and actions of the company.
 All personal wealth is linked to the business.
 Financial statements are not required in a sole
proprietorship as are typically required of
a corporation, meaning a lack of financial control is
very probable.
 It is difficult to find outside investors to fund sole
proprietorships, meaning growth potential is very
limited beyond a certain point.

 A partnership, of which various forms exist, is an
arrangement where parties agree to cooperate
to advance their mutual interests.
The three typical classifications of for
profit partnerships are:
 general partnerships,
 limited partnerships, and
 limited liability partnerships.

 A general partnership exists when partners divide
responsibility for management and liability as well as the
shares of profit or loss according to their internal
agreement.
 A limited partnership is a form of partnership similar to a
general partnership, except that in addition to one or
more general partners (GPs), there are one or more
limited partners (LPs). General Partners carry more liability,
and in cases of financial loss, the GPs will be liable.
 A limited liability partnership (LLP) is a partnership in which
some or all partners (depending on the jurisdiction) have
limited liability. In an LLP, one partner is not responsible or liable
for another partner's misconduct or negligence.

 Partnerships are relatively easy to establish.
 With more than one owner, the ability to raise funds may
be increased.
 The profits from the business flow directly through to the
partners' personal tax returns.
 The most obvious advantages to a partnership are the
ease in which they may be established, the combination of
a wider pool of skills and knowledge, and the increased
ability to raise more funds with more partners.partner.
 The business usually will benefit from partners who have
complementary skills.

 As an artificial being created by operation of
law.
 As artificial being, its powers, attributes and
properties are limited to those expressly
authorized by law or incident to its existence.
 Has separate juridical personality

 Is an association of persons who have
voluntarily joined together to achieve a
common end through the formation of a
democratically controlled organization,
making equitable contributions to the capital
required and accepting a fair share of the
risks and benefits for the understanding in
which the members actively participate.

ThankYou!

Globus SWOT Analysis

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