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SWOT Analysis – A Tutorial

SWOT Analysis, is a decision making tool used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats of any business decision from
aqusition or merger to competative planning. It helps in evaluation of of the
objectives considering internal and exernal factors associated with it.. The
technique is credited to Albert Humphrey, who led a research project at
Stanford university in the 1960s and 1970s using data from the Fortune 500
companies.

The aim of any SWOT analysis is to identify the key internal and external
factors that are important to achieving the objective. SWOT analysis
groups key pieces of information into two main categories:

Internal factors – The strengths and weaknesses internal to the

organization.

External factors – The opportunities and threats presented by the

external environment.

Any SWOT Analysis shold answer the following question

1. How can we Use each Strength?

2. How can we Stop each Weakness?
3. How can we Exploit each Opportunity?
4. How can we Defend against each Threat?

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Business News Analysis: Free Student Articles
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SWOT analysis is a contineuous exercise and should be conduct as an
audit for the company or its departments. Lets explore each factor of
swot in detail.
Strength vary from company to company ,industry to industry. In FMCG
distribution is the key strenght. Remember I told you one example about
Nihar oil sold to Marico by HUL. Strength can be tangeble like
manufacturing units, working captial or intengible like brand image or
skilled human resource. In IT sector guess what is the key strenght ?

Weaknesses are part of business life cyle. With in an industry a

weakness of one company can be strenght of another. But industrial
weakness is applied to all companies of that industry. Restaurants can’t
store cooked food for more is a weakness across the industry.
Encoding departmentwise weakness of a company is not a good way for
SWOT analysis of business as a whole , the weakness in one department
has a cascading effect on another. Low financial budget for marketing
department will definitly effect the sales of a newly launch brand. So
inferning low financial budget as a weakness can’t be true.It is only a
symptom of some major weakness. So while scaning the company for
weaknesses ,one should see the major or the key weakness.

Opportunity as the external factor depends upon the vision of the

leaders. Opportunites are of two type ; Relative and absolute.
Relative is when weakness of one company turned opportunity for
another and the absolute opportunity is one which has emerged due to
environmental factors like consumer taste, governement regulations,
cosumption behaviour and others.
Lets work it out with certain examples. In case of relative opportunity,
Threats are just reverse of opportunities.

SWOT analysis is not restricted to corporate level strategies. It can be

functional,departmental or multiple SBUs. An HR department can work-
out swot for further improvements as an internal process. I found that to
triple the power of SWOT analysis the strategist embedded it with PEST
analysis.
PEST Stands For : Political, Economic,Social,Technological. In real, this
analysis is a combination of broader factors that should be considered
while taking a decision.

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Only to be used for academic purpose.
Business News Analysis: Free Student Articles
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If you focus on opportunities see what factors from PEST are evolving as
your opportunites. I complete my statement with certain examples.

1) Political Opportunities: The use of halmets as mandatory in metros

affected the revenue of manufactureres.
2) Economic Opportunities: The rising disposible income of
consumers is seen opportunity by the retail industry that
witnessed by the recently opened malls in towns.
3) Social Opportunities: The social changes in entertainment explored
the market for pubs,discos and cafes.
4) Technology Opportunities: The rise of online emusic companies
opened the vast market . The next example I can quote is of cell
phones with multi functionalities. Children are much involved in
video games at home rather playing grounds.

The negligence of threat made most of the companies to lose to market

dominance. The emerging quartz technology was never taken as threat
by watch makers of mechanical watches. Quartz technology is now a
trend. IBM never took personal computer as a threat to their business.
They never forcasted that one fine day every business will run on
personal computer. I need not to define its downfall in the market. Do
you think our retails giants are surving on their strengths ? if you say no
I must say you are a good marketer.
“P” of PEST is still favouring the Indian retail companies. Once the Wall-
Mart will touch the india’s ground , you can’t imgine the warfare.
I quote you a simple example of swot analysis for milk industry.

SWOT
Description
COMPONENTS
a) Product Demand – Highly Optimistic
b) Product Flexibility – Highly flexible
c) Suppliers- Still unorganized market
covers majority of the market share that
Strengths
needs proper channalization.
d) Brand position – Super strong

a) Perishability of the product.

b) Consistency of supply
Weaknesses
c) Growing competition
d) Logistics and transportation

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Business News Analysis: Free Student Articles
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a) 5th ‘P’ of marketing ie packaging will play a

major role as USP for upcoming
companies.
Opportunities
b) Export to European and Middle-East
countries.

Threats a) Unorganized market building

General examples :
Strengths and weaknesses

Resources: Geographical location, Finance, human resource,

suppliers

Government rules and regulation regarding the business

Product range and diversity

Valuable intangible assets like brand name ,corporate image

Cooperative ventures

Competitive capabilities ( competitive advantage)

Threats and opportunities

Business acquisitions and mergers

Trends in the market

Economic condition

Joint ventures

Strategic alliances

Technology

Public expectations

Competitors and competitive actions

Global Markets

Environmental conditions

Now to sincerely learn this powerfull tool you have to work hard. Well I
give you an exercise to do.
Take any company or industry from the following and send it to me with
your swot analysis.I will add it to my articles ( ofcourse with your name)
and rectify (if any) problematic areas. As a gift I might send you a tool of
internsindia.com for swot analysis. ☺

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All Rights Reserved by www.internsindia.com
Only to be used for academic purpose.
Business News Analysis: Free Student Articles
www.internsindia.com-A FREE site for MBA live projects.

Compaies / Industries: Hotels, HLL, Star TV, Café Coffee Day, Barista

The next part of tutorial will cover swot analysis and its
applications in strategies.

All the best

Article Requested By: ( names of first 10 request sender)

Pritee Jhunjhunwala ,Vaishali Roa, Amit Sharma, Amresh, Arjun Rathod,
Santosh Pansare, Kaushal, Navneet, Himanshu,Pranav, Archana.

About Author: Author is a strategic consultant and among a few youngest

COO of India. The brand tools designed by the author are appreciated and
recognized by Mr. Philip Kotler and Jack Trout. He is currently heading the
operation and marketing department in Sylloge Corporation (Mother
Company of internsindia.com). You can mail to author on
siddhartha@internsindia.com for your queries.

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All Rights Reserved by www.internsindia.com
Only to be used for academic purpose.