MKT305 SWOT Analysis

Strengths, Weaknesses, Opportunities, and Threats

SWOT Planning and Organizing Tool Systematic approach to addressing positives/negatives facing company A framework for organizing company characteristics/situation and external situation Helps focus on key issues

 Strengths and weaknesses are generally internal factors. Opportunities and Threats are generally external issues.

Strengths Consider from both the view of the firm as well as from customers and competitors perspective Strengths are something the company does well or has unique capabilities in Ones strength is anothers weakness Questions:
What are the firms advantages over others? What does the firm do very well? What makes you stand out from your competitors?

Weaknesses Consider from internal and external viewpoint What is the company lacking or does not do well What areas in the company could be improved Be truthful so that weaknesses may be overcome as quickly as possible Ones strength is anothers weakness Questions.
What is done poorly? What can be improved? What should be avoided?

Opportunities and Threats Primarily external in nature Represent characteristics of:

New developments growth in potential markets changes in the competitive, economic, political/legal, technological, or socio-cultural environments

A threat to some is an opportunity to another.

 Questions on opportunities:
Is there a product/service area that others have not yet covered? Are there emerging trends/technologies that fit with your company's strengths?

Questions on threats:
Are your competitors becoming stronger? Are there emerging trends/technologies that amplify one of your weaknesses? Are increasing regulations and/or taxes expected?

For a company a strength could be: marketing expertise Patent/copyright/trademark location of your business innovative product company image any other aspect that adds value to your product or service

For a company a weakness could be: lack of marketing expertise undifferentiated products and service (i.e. in relation to your competitors) location of your business Inability to utilize new technologies damaged reputation

For a company an opportunity could be: a developing market such as the Internet/eBusiness mergers, joint ventures or strategic alliances a new international market A new technology that enhances effectiveness a market vacated by an ineffective competitor any external factor that may create demand or the possibility for increased profitability

For a company a threat could be: a new competitor in your market price wars with competitors a competitor has a new, innovative product or service Competitors have adopted a new technology that you dont have competitors have superior access to channels of distribution Competitor develops a new patented product/process

Word of Caution:
SWOT analysis can be very subjective. Do not rely on it too much. It is one tool to use Two people rarely come-up with the same final version of a SWOT. SWOT is just a method to organize internal and external factors. It is not definitive or all inclusive. It helps assess the situation and provide some direction for future planning.

SWOT for Southwest Airlines

Organizational (Internal) Strengths Highly productive pilots and ground crews Low Costs Weaknesses Inability to provide nonstop long distance travel Opportunities Ability to add scheduled flights to new cities Low prices enable market share growth Threats Difficulty securing new gates at existing airports Low cost rival Jet Blue - competition

Suggestions for conducting a SWOT Analysis: Be realistic; do not exaggerate strengths or be in denial about weaknesses Be honest about opportunities and threats as well Distinguish between where your technology is today, and where it could be in the future. Anticipate future changes and implications (guard against being blindsided) Be specific. Avoid grey areas. Always analyze in the context of your competitive environment. Keep your SWOT short and simple.

Using the SWOT Analysis Weaknesses should be looked at in order to convert them into strengths. Try to match your strengths with external opportunities to leverage attainment Threats should be neutralized and converted into opportunities. Strengths and opportunities should be matched. Balance between internal and external Prioritize and rank factors in order of importance

Expanding Your SWOT Analysis Delve deeper into the details of the technology. Include more detailed competitor information in the analysis. Take a closer look at the business environment. Expand the reach of a SWOT analysis through surveys. Get another set of eyes on situation

Questions?