• A firm's strengths are its resources

and capabilities that can be used for

developing a competitive advantage.
• Strong brand names
• Good reputation among customers
• Affiliation/registeration with some
reknowned
Institutions.
• The absence of certain strengths are
a weakness.
• Lack of patent protection
• A weak brand name
• Poor reputation among customers
• High cost structure
• Lack of access to key distribution
channels
• In some cases, a weakness may be
the flip side of a strength.
• For example, a firm has a large
amount of manufacturing capacity.
• While this capacity may be
considered a strength that
competitors do not share, it also may
be a considered a weakness if the
large investment in manufacturing
capacity prevents the firm from
reacting quickly to changes in the
strategic environment.
• The external environmental analysis
may reveal certain new opportunities
for profit and growth. Some
examples of such opportunities
include:
• An unfulfilled customer need
• Arrival of new technologies
• Loosening of regulations
• Removal of international trade
barriers
• Changes in the external
environmental also may present
threats to the firm. Some examples
of such threats include:

• Shifts in consumer tastes away from

the firm's products
• Emergence of substitute products
• New regulations
• Increased trade barriers
• To develop strategies that take into
account the SWOT profile, a matrix of
these factors can be constructed.

• The SWOT matrix, can be changed

into what is known as the TOWS
Matrix that is shown on the next
slide:
TOWS Analysis STRENGTHS WEAKNESSES

OPPORTUNITIES S-O STRATEGIES W-O STRATEGIES

THREATS S-T STRATEGIES W-T STRATEGIES

• S-O strategies pursue
opportunities that fit well the
company's strengths.
• W-O strategies overcome
weaknesses to pursue opportunities.
• S-T strategies identify ways that
the firm can use its strengths to
reduce its vulnerability to external
threats.
• W-T strategies make a defensive
• Albert Humphrey (1960s-70s)
2.Satisfactory
3. Opportunity
4. Fault
5. Threat
• SOFT Analysis
• Urick and Orr (1964)

• From SOFT to SWOT

• LET ME TELL YOU . . . .

• SWOT IS A USELESS THING

• Planned Strategy:

• 1-Goal or objective

• 2-SWOT

• 3- Evaluation SWOT Results

• 4- Action
 Aim Goal or objective

Apply SWOT
Assess

Activate Evaluate SWOT Results

Apply Take action

A SWOT analysis with the objective of:
"To double the business in the next
Strengths and Weakness and
three years." .
Oppertunities Threats

• In business since • Jnr. Manager has no

19xx. experience or
MD has xx years of education for his
experience in the position of Sales
industry and as Manager            
head of the
company. • Marketing assistant
• Sales and profits has little marketing
have grown steadily experience
• Sales and profits • MD says that he is
were Rs.xx million not a good
in 19xx. executive
              • Employees feel free
• MD responds to complain directly
personally to all to MD
customer • MD can't find a
complaints good General
              Manager at the
• MD wants to get salary he wants to
involved in the field pay
of marketing • Company is having
    trouble selling
• "We have an GEMA (its new
excellent reputation product)
for quality," MD • MD is worried about
converting 5,000
• Manufactured • Stock held increased
Products," too much during
"Modifications" and recent months with
"Repairs" have Gross resulting interest cost
Profit margins greater of RS.4,000 a month
than 50% • MD can't break the
habit of getting
involved in
everything
• The company does
not appear to have
historical trend data
• They spent
Rs.992,000
advertising GEMA and
• No track record of previous years
growth rate
• Difficulties in Selling new product
• What is more realistic then? . . . . .
• Redefine the objective as to
INCREASE THE BUSINESS IN NEXT 3
YEARS.
• Step 1 – Information collection –
In the here and now…

“BE REALISTIC! AVOID

MODESTY.”

• Step 2 – What might be…

• Step 3 – Plan of action…

• Assemble SWOT group.
• Manage necessary components.
• Set up meeting times
• Distribute/ complete the tool to
individuals
• In the group meeting, combine
individual answers. Collaborate on
each category. Complete the
analysis.
• Discuss how to use the information
gathered from the SWOT for your
• SWOT may result in an exercise for
the sake of an exercise (i.e.
useless).
• Trust . . . .
1- in your SWOT Team
2- in your abilities to face the
challenges the weakness and threats
• Ability and willingness to implement
change
• Diversity
• Time