SWOT analysis

Date: 2015-10-07; view: 499.

Introduction

In strategic planning, once direction is identified and before developing and introducing a new strategy, a company should analyze its position. Some useful tools for analyzing the strategy are SWOT analysis, PEST analysis and Michael Porter's five-forces model.

The SWOT analysis is a planning tool, which assesses the firm's strategic profile in terms of its strengths, weaknesses, opportunities and threats. Focusing on both internal and external environments, it serves to highlight a firm's distinctive or core competencies, which will enable it to gain competitive advantage and competence mastery.

The SWOT analysis is usually expressed as a matrix:

Some of the key issues which are addressed in a SWOT analysis are:

External environment: opportunities and threats

· What are the main factors in the societal environment (political-legal, economic, sociocultural and technological)?

· What is the market strength of competitors?

· What new products or services, including those of the firm and competitors, are in the pipeline?

· What is the level of consumer demand and can it be expected to remain stable?

· What is the likely threat of new entrants in the market for the firm's products?

Internal environment: strengths and weaknesses

· Does the organization have a structure that helps it to achieve its objectives?

· Does it have clear marketing objectives and strategy?

· Does the organization use information technology (IT) effectively in all aspects of its activities?

· Does its investment in R&D match or exceed that of competitors?

· Does the organization meet its financial objectives?

· To what extent does the firm have clear HRM objectives and strategies in areas such as employee motivation, staff turnover and provision of training?

►Perform a SWOT analysis for a business selling French and Italian wine online. Consider the advantages of online selling that compensate for the perceived drawbacks of this sort of a business. Strategic options should therefore emerge in your analysis.

►Compare two online retailers such as www.bolero.ru and www.ozon.ru by performing a PowerPoint SWOT analysis for each.

‘CASE-1' POINT