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SWOT Analysis

S W O T

WHAT IS SWOT?• Acronym for Strengths, Weakness, Opportunities and Threats.• Planning tool used to understand Strengths, Weakness,

Opportunities and Threats involved in a project/ company.• Used as a 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.

CONTINUED.. Started by Albert Humprey Research project was done at Stanford University (1960) Humprey and original research team used the categories. What is good in the present is satisfaction, good in the

future. Bad in the present is a fault, and bad in future is a threat.” Internal factors involves are of the following People, human resources in an organisation. People and skill, their experience, knowledge Staff development Properties like equipment, other facilities Process like finance etc. Financial resources, governance Management/ leadership Sales, markets, capital strategy, suppliers, consumer market research External factors involves are of the following Customer analysis Competitive analysis Market analysis Environmental analysis

STRENGTH• Strong brand image• HIGH quality product• Latest technology • High intellectual capital • Coordinal industrial relations

WEAKNESS• Weak distribution network • Narrow product line• Rising cost • Poor marketing plans

OPPOURTUNITY• New markets• Profitable new acquisition• R & D areas in new areas• New businesses

THREAT• Increase in competition• Barrier to entry• Change in consumer taste• New or substitute products• Threat of takeover

Tows approach:INTERNALEXTERNAL

STRENGTH(S)

WEAKNESS(W)

OPPOURTUNITIES (O) A strength that use strength to take advantage of opportunities

Strengths or strategies that take advantage of opportunities by overcoming weaknesses

THREAT (T) Strategies that strength to avoid the emerging threats

Strategy or strength that minimizes weakness and avoid threat

AIM OF SWOT ANALYSISTo 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.To provide linearity to the decision making process allowing

complete ideas to be presented systematically.

WHO NEEDS 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 target Customer service can be better. Launching a new business unit to pursue a new business. New team leader is appointed. Company: When revenue, cost and expense targets are not being achieved. Market share is declining Industry conditions are unfavorable Launching a new business venture

CONTD…

SWOT analysis is also required for/duringchanging jobsproduct launchdecision making personal development planningproduct evaluationbrainstorming meetingsworkshop sessions

HOW TO CONDUCT SWOT ANALYSIS?

• Analyze internal and external environment• Perform SWOT analysis and document• Prepare action plans

BENEFITS OF SWOT ANALYSIS1.Knowing the competitionReviews a companies competitors and benchmark against them to configure strategies that will put the company in a competitive advantage2. Decision making tool:Provides well-rounded information that prompt well-formed decisions.3. Forecasting:Provides a variety of information critical to for encased variables.Threats for eg: can impact a business forecast. By understanding the company’s advantages and disadvantages forecast will be pure accurate.Besides the broad benefits here are few more benefits of conducting SWOT analysis:Helps in setting of objectives for strategic planningProvides a framework for identifying and analyzing strengths, weakness, opportunities and threats.Provides an impetus to analyze a situation and develop suitable strategies and tactic.Basis for assessing core capabilities and competencies.Evidence for, and cultural key to change.Provides a stimulus to participation in a group experience.

PITFALLS OF SWOT ANALYSIS• Can be very subjective.• May cause organizations to view circumstances as very simple

due to which certain key strategic contact may be overlooked.• Categorizing aspects as strengths , weakness ,opportunities

and 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 use 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.

CASE STUDY 1

SUNPHRMA COMPONYPARENT COMPONY: SUN PHARMA INDUSTRIESCATEGORY : PHARMACEUTICALSECTOR : HEALTH CARETAGLINE : LEADERSHIP THROUGH FOCUSED RESEARCHUSP : SUN PHARMA IS 5th LARGEST AND MOST PROFITABLE COMPANY IN INDIA

CONTD…SWOT ANALYSISSTRENGTH : - 1. STRONG GROWTH IN EMERGING MARKET BUSINESS 2. INTRODUCTION OF PANTOPRAZOLE & ELOXATIN IN US MARKET HAS VERY LIMITED COMPETITION 3. THEY HAVE STRONG MARKETING & SALES FORCE OF OVER 12,000 EMPLOYEES 4. THEY HAVE SUCCESFULLY ACQUIRED TARO PHARMA WHICH HAS FURTHER CONSOLIDATED THEIR POSITION IN INDIAN MARKETS 5. STRONG BRAND PRESENCE IN INDIA & US MARKETS

CONTD..

WEAKNESS: 1. STIFF COMPETITION FROM MANY INDIA & OTHER GLOBAL BRAMDS MEANS LIMITED MARKET SHARE GROWTH2. LIMITED PRESENCE IN EMERGING MARKETS & EUROPEAN COUNTRIES

CONTD…

OPPORTUNITIES:1. THEY CAN LEVERAGE THEIR ACQUISITIONS TO FURTHER INCREASE THE GROWTH 2. THEY CAN INCREASE THEIR PRESENCE IN CONTRACT MANUFACTURING 3. INCREASING HEALTHCARE AWARENESS IN INDIA

CONTD…

THREATS:1. THERE IS GROWING COMPETITION IN GENERICS MARKET2. STRINGENT PATENT REGULATION3. HIGH PRICE SENSITIVITY OF CONSUMERS

COMPETITOR: CIPLA

CASE STUDY 2SWOT ANALYSIS ON GOOGLE• It is a privately owned corporate• Google successfully established its brand name in internet

search engines market. • Though Google is a dominating player in internet searching

market, it has to compete with its rivals in this field where there is no long time entry barrier.

• Google can expand or change its business model to survive in this best search engine race.

CONTD…STRENGTHS:

1. Already no 1 search engine has established a brand name, in which its users trust.

2. Its dependable, reliable and fast.3. Needs very little user marketing as the name itself is getting

words by mouth publicity.4. It has a simple interface and it gives comprehensive result

without confusing its users.5. It has low operation cost.6. It provides the interface to 88 languages to make it

comfortable to search for users in different countries.

CONTD…

7. It also weights the votes and ranks web pages with its technology to give its users access to most important pages first.

8. It offers localized search called “search by locations” where users can get results showing various products and services nearby.

9. It is considered among the top 10 brand in the US.10. It uses state-of-the-art technology to catalog the pgs to give

most updated outcomes to its users.

CONTD…WEAKNESSES:

1. Many spammers manipulate googles ranking technology by creating dummy sites with thousands of links to pages that they wanted google to rank highly.

2. Google’s cost per click ads charging and ranking policy is confusing and makes it difficult for marketer to predict where their ads would be positioned and how much they would cost.

3. Its localized search also results in errors at times.4. Although a dominating player, only 50% to 65% of web

search is accurately answered.

CONTD…OPPORTUNITIES:

1. It has a vast opportunity for reaching new groups and contents.

2. It can merge with an already existing market portal to cover more grounding regarding its users

CONTD…THREATS:

1. There is no longtime entry barrier in this business. 2. Many competitors can emerge in coming years with same

services, better interface.3. Google confusing cost per click ranking and charging policy

could disappoint its advertiser and company would start losing many of them.

4. Google can get trapped in issues regarding privacy if it decides to go for highly personalized search.

5. If Google decides to merge with some already established company, it will start losing its well earned brand name.