SWOT Analysis
Shrangesh nigam
SWOT Analysis
SWOT Analysis is an effective way of
identifying your Strengths and Weaknesses,
and of examining the Opportunities and
Threats you face.
Strengths:
• What advantages do you have?
• What do you do well?
• What relevant resources do you have access to?
• What do other people see as your strengths?
Weaknesses:
What could you improve?
What do you do badly?
What should you avoid?
Opportunities:
Where are the good opportunities facing you?
What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
Changes in technology and markets on both a broad
and narrow scale
Changes in government policy related to your field
Changes in social patterns, population profiles,
lifestyle changes, etc.
Local Events
Threats:
What obstacles do you face?
What is your competition doing?
Are the required specifications for your job,
products or services changing?
Is changing technology threatening your
position?
Do you have bad debt or cash-flow problems?
Could any of your weaknesses seriously
threaten your business?
Case Study-SWOT Analysis
Wal-Mart
Wal-Mart Stores
Wal-Mart Stores, Inc. is the world's largest
retailer, with $256.3 billion .
The company employs 1.6 million associates
worldwide through
more than 3,600 facilities in the United States
and more than 1,570 units .
Strengths
• Wal-Mart is a powerful retail brand. It has a reputation for value for money,
convenience and a wide range of products all in one store.
• Wal-Mart has grown substantially over recent years, and has experienced global
expansion (for example its purchase of the United Kingdom based retailer ASDA).
• The company has a core competence involving its use of information technology to
support its international logistics system. For example, it can see how individual
products are performing country-wide, store-by-store at a glance. IT also supports
Wal-Mart's efficient procurement.
• A focused strategy is in place for human resource management and development.
People are key to Wal-Mart's business and it invests time and money in training
people, and retaining a developing them.
Weaknesses
• Wal-Mart is the World's largest grocery retailer and
control of its empire, despite its IT advantages, could
leave it weak in some areas due to the huge span of
control.
• Since Wal-Mart sell products across many sectors
(such as clothing, food, or stationary), it may not
have the flexibility of some of its more focused
competitors.
• The company is global, but has has a presence in
relatively few countries Worldwide.
Opportunities
• To take over, merge with, or form strategic alliances with other
global retailers ,focusing on specific markets such as Europe or
the Greater China Region.
• The stores are currently only trade in a relatively small number
of countries. Therefore there are tremendous opportunities for
future business in expanding consumer markets, such as China
and India.
• New locations and store types offer Wal-Mart opportunities to
exploit market development. They diversified from large super
centers, to local and mall-based sites.
• Opportunities exist for Wal-Mart to continue with its current
strategy of large, super centers.
Threats
• Being number one means that you are the target of
competition, locally and globally.
• Being a global retailer means that you are exposed to
political problems in the countries that you operate in.
• The cost of producing many consumer products tends
to have fallen because of lower manufacturing costs.
Manufacturing cost has fallen due to outsourcing to
low-cost regions of the World. This has lead to price
competition, resulting in price deflation in some
ranges. Intense price competition is a threat.
TOWS Matrix
TOWS Matrix
TOWS Analysis is an effective way of
combining a) internal strengths with external
opportunities and threats, and b) internal
weaknesses with external opportunities and
threats to develop a strategy.
Strengths/Opportunities
Consider all strengths one by one listed in the
SWOT Analysis with each opportunity to
determine how each internal strength can help
you capitalize on each external opportunity.
Strength/Threats:
Consider all strengths one by one listed in the
SWOT Analysis with each threat to determine
how each internal strength can help you avoid
every external threat.
Weaknesses/Opportunities:
Consider all weaknesses one by one listed in
the SWOT Analysis with each opportunity to
determine how each internal weakness can be
eliminated by using each external opportunity.
Weaknesses/Threats:
Consider all weaknesses one by one listed in
the SWOT Analysis with each threat to
determine both can be avoided.
Case Study- Application of the
TOWS Matrix to
Volkswagen
Internal Strengths:
1. Strong R & D and Engineering .
[Link] Sales and Service Network
(Although Several Less Successful
[Link] Production/Automation Models
were Introduced)
Internal Weaknesses:
1. Heavy Reliance on One Product(Although
Several Less Successful Models were
Introduced)
[Link] Costs in Germany
[Link] Experience With U.S. Labor Unions if
Building Plant in the U.S.
External Opportunities:
[Link] Affluent Market Demands More
Luxurious Cars with Many option.
[Link] Offers to Build an Assembly
Plant in U.S.
Chrysler and American Motors Need Small
Engines
External Threats:
1. Exchange Rate: Devaluation of Dollar in
Relation to Deutshe Mark (DM)
[Link] from Japanese and U.S.
Automakers
3. Fuel Shortage and Price
SO:
1. Develop and Produce Multiproduct Line
with Many Options, in Different Price Classes
(Dasher, Scirocco , Rabbit, Audi Line)
[Link] Assembly Plant Using R & D,
Engineering, and Production/Automation
Experience.
[Link] Engines for Chrysler and AMC
WO:
1. Develop Compatible Models for Different
Price Levels (Ranging from Rabbit to Audi
Line)
[Link] Cope with Rising Costs in Germany,
Build Plant in U.S., Hiring U.S. Managers with
Experience in Dealing with U.S. Labor Unions
ST:
1. Reduce Effect of Exchange Rate by
Building a Plant in the U.S.
[Link] Competition with Advanced Design
Technology - e.g. Rabbit.
[Link] Fuel Consumption Through Fuel
Injection and Develop Fuel Efficient Diesel
Engines.
WT:
A. Overcome Weaknesses by Making Them
Strengths (Move Toward OS Strategy)
[Link] Threat of Competition by
Developing Flexible Product Line
B. Possible Options not Exercised by VW:
[Link] in Joint Operation with Chrysler or
AMC
[Link] From U.S. Market
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