Assignment # 02

SWOT Analysis

By
Sohail Abbas
Sp11-BEC-081
Section (A)
Instructor
Dr. Nazir A. Hawary

Course Title
Project Planning and Management

Dated:
24th September 2014

COMSATS Institute of Information Technology Lahore

Department of chemical engineering

SWOT Analysis

1. History:
In the 1960s and 70s, Albert Humphrey is said to have developed this strategic planning tool
using data from the top companies in America at the time. Its basic organizing principles have
remained largely unchanged in the field of strategic management. It is a systematic framework
which helps managers to develop their business strategies by appraising their internal and
external determinants of their organizations performance [1].

2. Definition of SWOT:
A SWOT Analysis is a business analysis method that organization can perform for each of its
products, services and markets when deciding on the best approach to achieve future growth. A
SWOT Analysis is a tool which permits users to look at the direction a company or organization
may wish to move towards in the future. SWOT Analysis looks at the strengths, weaknesses,
opportunities and threats that are relevant to an organization in a new venture. A SWOT Analysis
is a useful tool, which in conjunction with others can help make informed decisions. By
specifying clear objectives and identifying internal and external factors that are either helpful or
not, a short and simple SWOT analysis is a useful resource which may be incorporated into an
organizations strategic planning model [2].
i.

Strengths- Internal attributes those are helpful to the organization to achieving its
objective.

ii.

Weaknesses Internal attributes that are harmful to the organization to achieving its
objective.

iii.

Opportunities External factors that help the organization achieve its objective.

iv.

Threats - External factors that are harmful to the organization to achieving its objective.

After identifying the SWOTs, identification of the factors and their interdependence helps
clarify the steps required to achieve the ending objectives.

3. Internal and External Factors:[3]

The SWOT analysis framework involves analyzing the strengths (S) and weaknesses (W) of the
businesss internal factors and the opportunities (O) and threats (T) of its external factors of
performance as shown in fig 1. Through this analysis strengths and weaknesses within an
organization can be matched with the opportunities and threats operating in the environment so
that an effective strategy can be formulated. Therefore an organization can derive an effective
strategy by taking advantage of its opportunities by using its strengths and neutralize its threats
by minimizing the impact of its weaknesses. Moreover, SWOT analysis can be applied to both a
whole company as well as a specific project in order to identify new company strategies and
appraise project feasibility.

Fig 1

3.1 Internal Analysis:

The internal analysis of organization should contain its culture, Expertise, resources and unique
qualities within the market place. The strengths and weaknesses of a company relate to its
internal elements such as resources, operational programs and departments such as sales,

marketing and distribution. Strength is something that has positive implication. It adds value or
offers the organization a competitive advantage.

More specifically, a strength is an

advantageous skill or competency that a business or project possesses that allows it to create
competitive advantages, such as its strong research and development capabilities. It includes
tangible assets such as available capital, equipment, credit, established and loyal customers,
copyrighted materials, patents, and other valuable resources. A weakness on the other hand is a
strategic disadvantage such as a skill that the business or project lacks which limits it and creates
potential risks in negative economic conditions. Weaknesses are those things that detract from
the value of your offering or place you at disadvantage when compared with your competitors.
The more accurately you identify your weaknesses, the more valuable the SWOT analysis will
be.

3.2 External Analysis:

External factors include the environment your organization operates in, its market, eco-system
and all of the third parties involved. An opportunity is a desirable condition which can be
exploited to consolidate and strengthen a strategic position, such as growing demand for a trendy
new product which it could consider selling. A threat on the other hand, is a condition that
creates uncertainties which could potentially damage an organizations performance and market
share. Threats include the introduction of new competing products or services, foreign
competition, technological advancements, and new regulations. Therefore, the company needs to
develop strategies to overcome these threats in order to prevent the loss of its market share. It
must be noted, however, that opportunities and threats exist in the environment and therefore are
often beyond the control of the organization but they do offer suggestions for strategic direction.
The SWOT analysis, as a result, demands a great deal of research into an organizations present
and future position. Its results provide a useful source of information from which an organization
can go on to develop policies and practices which allow it to build upon its strengths, minimize
its weaknesses, seize its opportunities and make contingency plans or measures to cancel or
reduce threats.

4. Guidelines:
Before carrying out a SWOT analysis, consider the following guidelines [4]
i.

Be realistic about strengths and weaknesses. When performing a SWOT analysis on your
business, be neither modest nor overly optimistic.
Consider answers from the companys point of view and from the point of view of

ii.

customers, vendors, distributors, and others who do business with them.

iii.

Distinguish between where the organization is today and where it could be in the future.

iv.

Note that the SWOT is subjective. No two people will come up with the same SWOT.

5. Example:
Fauji Fertilizer Company brief history
FFC is a leading fertilizer production group in Pakistan, with over 60 % market share in the
sector. Incorporated in 1978 as a private limited company, it is a joint venture between Fauji
Foundation and Haldor Topsoe of Denmark. At present the Fauji foundation has three fertilizer
plants, two at Goth Macchi and third at Mirpur Mathelo. Another plant is at Karachi named
FFBL (formerly FFC-Jordan Fertilizer Company Limited) in which Fauji fertilizer has got the
maximum share of 50.2%.
SWOT Analysis of Fauji Fertilizer Company
5.1 Strengths:
i.

The market leader in the fertilizer sector.

ii.

Enjoys a very good reputation among the general public as well as the corporate sector.

iii.

High quality products.

iv.

Friendly atmosphere in the organization which leads to motivated employees and higher
productivity.

5.2 Weaknesses:
i.

Armed forces management. The ex-army officers lack business acumen and could be
found wanting if Engro launches a hostile marketing offensive.

ii.

Lack of marketing. FFC products are rarely seen on satellite TV channels.

5.3 Opportunities:
i.

Further increase their production capacity.

ii.

Introduce even better quality products.

iii.

Expand into neighboring countries like Afghanistan and Iran.

iv.

In the absence of little competition, FFC can further increase its market share.

5.4 Threats:
i.

Engro Fertilizer is the biggest threat to Fauji Fertilizer due to its rapidly increasing
market share and sound financial backing.

ii.

Adverse agricultural policies by the government could also affect FFC.

References:
1. Humphrey, Albert (December 2005). "SWOT Analysis for Management Consulting".
SRI Alumni Newsletter (SRI International).
2. Chapman, A. (2007). SWOT analysis. Retrieved October 10, 2007
3. JRC European Commission. (2007). SWOT (strengths weaknesses opportunities and
threats) analysis. Retrieved October 19, 2007
4. Cadle, J, Paul, D. and turner, P.(2010). Business Analysis Techniques, 72 Essential tools
for Success, BCS The Chartered Institute for IT.