3. Content
•What is SWOT analysis?
•Aim of SWOT analysis.
•Who need SWOT analysis?
•How to conduct SWOT analysis?
•Pitfalls of SWOT analysis.
•BCG Matrix
•Benefits & Limitation
•Conclusion
4. What is SWOT analysis?
•A technique that enables a group or individual to
move from everyday problems and traditional
strategies to a fresh prospective.
•SWOT analysis looks at your strengths and
weaknesses, and the opportunities and threats
your business faces.
5. What is SWOT analysis?
Technique is credited to Albert
Humphrey who led a research project
at Stanford University in the 1960s and
1970s.
Used as framework for organizing and
has been adopted by organizations of
all types as an aid to making decisions
7. Strength
Characteristics of the business or a 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, process
capabilities, financial resources, products
and services, customer goodwill and brand
loyalty.
8. 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.
9. 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.
10. THREATS
External elements in the environment
that could cause trouble for the
business ,beyond an organization’s
control.
Arise when conditions in external
environment jeopardize the reliability
and profitability of the organization’s
business.
Threats are uncontrollable. When a
threat comes, the stability and
survival can be at stake.
11. Aim of SWOT analysis
•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 provide linearity to the decision
making process allowing complex
ideas to be presented systematically.
12. Who need SWOT analysis?
Job Holder
• When supervisor has issues with work output
• Assigned to a new job
• New financial year – fresh targets
• Job holder seeks to improve performance on the job
Business Unit
When the team has not met its targets
• Customer service can be better
• Launching a new business unit to pursue a new business
• New team leader is appointed
13. Who need SWOT analysis?
Company
• When revenue, cost & expense targets are not being achieved
• Market share is declining • Industry conditions are unfavourable
• Launching a new business venture
15. How to conduct SWOT analysis?
Analyse Internal & External Environment
16. How to conduct SWOT analysis?
Perform SWOT Analysis & Document
1. Establish the objectives
2. Select contributors
3. Allocate research & information gathering tasks
4. Create a workshop environment
5. List Strengths, Weaknesses, Opportunities, & threats
6. Evaluate listed ideas against objectives
7. Carry your findings forward
17. How to conduct SWOT analysis?
Prepare Action Plans
Things that MUST be addressed immediately
Things that can be handled now
Things that should be researched further
Things that should be planned for the future
18. Pitfalls of SWOT Analysis
Categorizing aspects as strengths, weaknesses, opportunities & threats
might be very subjective as there is great degree of uncertainty in
market.
To be effective, SWOT needs to be conducted regularly. The pace of
change makes it difficult to anticipate developments.
The data used in the analysis may be based on assumptions that
subsequently prove to be unfounded [good and bad].
It lacks detailed structure, so key elements may get missed.
Can be very subjective. Two people rarely come up with the same final
version of a SWOT. Use it as a guide and not as a prescription.
19. BCG MATRIX
Boston Consultancy Group Matrix
BCG Matrix is developed by Bruce Henderson of the Boston Consulting
Group in the early 1970’s
A strategic planning tool based on the philosophy that a product’s
market growth rate and market share are important in determining
marketing strategy
businesses or products are classified as low or high performers
depending upon their market growth rate and relative market share
20. BCG MATRIX
It is a portfolio planning model
which is based on the observation
that a company’s business units can
be classified in to four categories:
•Stars
•Question marks
•Cash cows
•Dogs
21. Stars
High growth, High market share
Stars are leaders in business
They also require heavy investment, to maintain its
large market share.
It leads to large amount of cash consumption and cash
generation.
Attempts should be made to hold the market share
otherwise the star will become a CASH COW.
22. CASH COWS
Low growth , High market share
They are foundation of the company and often the
stars of yesterday.
They generate more cash than required.
They extract the profits by investing as little cash as
possible
They are located in an industry that is mature, not
growing or declining.
23. DOGS
Low growth, Low market share
Dogs are the cash traps
Dogs do not have potential to bring in much cash
Number of dogs in the company should be minimized.
Business is situated at a declining stage.
25. QUESTION MARKS
High growth , Low market share
Most businesses start of as question marks
They will absorb great amounts of cash if the market
share remains unchanged, (low)
Question marks have potential to become star and
eventually cash cow but can also become a dog.
Investments should be high for question marks.
26. BENEFITS
BCG MATRIX is simple and easy to understand.
It helps you to quickly and simply screen the
opportunities open to you, and helps you think about
how you can make the most of them.
It provides a base for management to decide and
prepare for future actions.
It is used to identify how corporate cash resources can
best be used to maximize a company’s future growth
and profitability.
27. LIMITATIONS
BCG MATRIX uses only two dimensions, Relative market share and
market growth rate.
The model neglects small competitors that have fast growing market
shares.
Sometimes Dogs can earn even more cash as Cash Cows.
High market share does not mean profits all the time.
Problems of getting data on market share and market growth.
28. Conclusion
Though BCG MATRIX has its limitations it is one of
the most FAMOUS AND SIMPLE portfolio planning
matrix ,used by large companies having multi-
products.
Editor's Notes
Strengths and weaknesses are internal to the company (think: reputation, patents, location). You can change them over time but not without some work.
Opportunities and threats are external (think: suppliers, competitors, prices)—they are out there in the market, happening whether you like it or not. You can’t change them.
Abundant financial resources, Well-known brand name, Economies of scale, Lower costs [raw materials or processes], Superior management talent, Better marketing skills, Good distribution skills
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
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 .
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.
Workshop Sessions Brainstorming Meetings Strategic Planning Product Evaluation
Competitor Evaluation Personal Development Planning Decision Making Product Launch
1 Purpose of conducting a SWOT may be wide / narrow, general / specific
2 Expert opinion may be required for SWOT
3 Background preparation can be carried out in two stages – Exploratory and Detailed. Information on Strengths & Weaknesses should focus on the internal factors.
4 Encourage an atmosphere conducive to the free flow of information.
Once the SWOT analysis has been completed, mark each point with: