Strategic Analysis-Strengths, Weaknesses, Opportunities, and Threats,.ppt

Strengths, Weaknesses, Opportunities, and Threats,

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STRATEGIC ANALYSIS

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Asenvironmentchanges,companies
needtochangetheirstrategiestoadaptto
theenvironmentnotonlytoprosperbutalso
tosurvive.Basedonthemultiplestrategic
choices,eachchoiceisanalyzedandthe
bestoneisselectedandimplemented.
Strategiesaretobechosenatthe
corporatelevel,businesslevelandfunctional
level.Astrategicchoicehastobemadefrom
amongthesealternatives.
Strategicanalysisandchoicearetwo
importantcomponentsoftheimplementation
stageofthestrategicmanagementplan.
Thesetwocomponentsarecruciallinksinthe
strategicmanagement implementation
procedure.

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Thestrategicmanagementprocesshasthreemaincomponents
asshownbelow

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What is Strategic Analysis?
Itisallaboutanalyzingthestrengthof
businesses’positionandunderstanding
theimportantexternalfactorsthatmay
influencethatposition.
Strategicanalysisreferstotheprocessof
conductingresearchonacompanyandits
operatingenvironmenttoformulatea
strategy.
Strategicanalysisisessentialtoformulate
strategicplanningfordecisionmakingand
smoothworkingofthatorganization.With
thehelpofstrategicplanning,the
objectiveorgoalsthataresetbythe
organizationcanbefulfilled.

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What is Strategic Analysis?
The definition of strategic analysis may differ from an academic or
business perspective, but the process involves several common
factors:
1.Identifying and evaluating data relevant to thecompany’s strategy
2.Defining the internal and external environments to be analyzed
3.Using several analytic methods.

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Strategic Analysis
Some of the strategic analysis techniques are as below:
1.PESTLE analysis
2.SWOT Analysis
3.Environmental threat and opportunity profile (ETOP)
4.Strategic Advantage Profile (SAP)
5.Porter’s Value chain Analysis
6.Porter’s five forces Model of competition
7.David aaker model etc.

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SWOT Analysis
Ascanoftheinternal&external
environmentisanimportantpartofstrategic
planningprocess.
Environmentalfactorsinternaltothefirm
usuallycanbeclassifiedasstrengths[S]or
weakness[W]&thoseexternaltothefirmcan
beclassifiedasopportunities[O]orthreats[T].
Suchanalysisofthestrategicenvironmentis
referredtoasaSWOTanalysis.
Itinvolvesthecollection&portrayalof
informationaboutinternal&externalfactors
whichhaveormaybehave,animpacton
business.

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S
Things the company does well.
W
Things the company does not do well.
O
Conditions in the external environment
that favor strengths.
T
Conditions in the external environment
that do not relate to existing strengths
or favor areas of current weakness.
SWOT Analysis

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When to conduct SWOT Analysis
ASWOTanalysiscanbeusedinavarietyofsituations—it’snot
restrictedbyaspecificindustryordepartment,accordingtotheSWOT
AnalysisGuide.
SWOTanalysisisatechniqueforassessingtheperformance,
competition,risk,andpotentialofabusiness,aswellaspartofa
businesssuchasaproductlineordivision,anindustry,orotherentity.
SWOTcanbeusedtoexplorenewventures,products,
acquisitionsormergers.Itcanhelpbusinesseschangecoursemid-
project,planouthowtoinvestmoney,understandcompetitorsandto
identifythebrand’smission.

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When to conduct SWOT Analysis
SWOTcanalsohelpnon-profitcompaniesandgovernment
agenciesmanageorallocategrants,donationsandfunding.
It’saflexibleanalysistoolthatcanbeappliedtoarangeof
businesssituationsrelatingtoeverythingfromITtomarketingto
operations.

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How to use the tool?
To carry out a SWOT analysis, write down answers to the following
questions where appropriate, use similar questions & whenever possible,
consider your answers from your own point of view & from the point of view
of the people you deal with.
Strengths:
What advantages does your company have?
What do you do better than anyone else?
What unique or lowest-cost resources do you have access to?
What do people in your market see as your strengths?

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How to use the tool?
Weaknesses:
What could you improve?
What should you avoid?
What are people in your market likely to see as weaknesses?
What factors lose you sales?
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.
Local events.

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How to use the tool?
Threats:
What obstacles do you face?
What is your competition doing that you should be worried
about?
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?
Therefore,finallycarryingoutthisanalysiswilloftenbeilluminating
bothintermsofpointingoutwhatneedstobedone&inputtingwhat
wemightseeasaproblemintoperspective.Youcanthenusea
simplematrix.

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SWOT Matrix
STRENGTH
•Thefactorsthatgiveanedgeforthecompanyoveritscompetition.
•Strengthsdescribewhatanorganizationexcelsatandwhatseparates
itfromthecompetition:astrongbrand,loyalcustomerbase,astrong
balancesheet,uniquetechnology,andsoon.

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SWOT Matrix
WEAKNESSES
•Thefactorsthatcanbeharmfulifusedagainstthefirmbyits
competitors.Theorganizationweaknessesareestablishedthrough
failures,losses&theincapabilitytorespondtomarketchanges.
Analysisofweaknesseswilldeterminethemanagementstrategyto
develop&implementtheremedialmeasures.
•Weaknessesstopanorganizationfromperformingatitsoptimum
level.Theyareareaswherethebusinessneedstoimprovetoremain
competitive:aweakbrand,higher-than-averageturnover,highlevels
ofdebt,aninadequatesupplychain,orlackofcapital.

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SWOT Matrix
OPPORTUNITIES
•Opportunities refer to favorable external factors that could give an
organization a competitive advantage. For example, if a country
cutstariffs, a car manufacturer canexport its cars into a new market,
increasing sales andmarket share.
•However, a plan needs to be developed to use these opportunities
efficiently & at the appropriate time.

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SWOT Matrix
THREATS
•Theunfavorablesituationswhichcannegativelyaffectthebusiness.
•Threatsrefertofactorsthathavethepotentialtoharmanorganization.
Forexample,adroughtisathreattoawheat-producingcompany,asit
maydestroyorreducethecropyield.Othercommonthreatsinclude
thingslikerisingcostsformaterials,increasingcompetition,tightlabor
supplyandsoon.
•The threats occur from economic, social, political or technological
reasons. Technological advancements may render the organization
technology as obsolete.

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SWOT Matrix
TheSWOTmatrixidentifiestheStrength,Weaknesses,Threats&
Opportunitiesofabusinessfirm.Thisformationcanbeusedbythe
companyinmanywaysinevolvingitsoptionsforthefuture.
Ingeneral,thecompanyshouldattemptto:-
Builditsstrength
Reverseitsweaknesses
Maximize its response to opportunities
Overcome to its threats.

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SWOT Matrix

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SWOT Analysis
The SWOT analysis of Patanjali shows that the company is well on its
way to greater success. The company simply has to manage its
communications and abstain from anything that directly impacts Baba
Ramdev. It needs to place more confidence in itself to pursue the
markets worldwide and connect with more consumers that would be
interested in its brand and offerings.

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Action Plan
Choosing an action plan after a SWOT analysis is a complicated
process that is specific to each decision in each company. However,
there is a general philosophy regarding how to approach action with the
results of a SWOT. Here it is:

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Action Plan
AnotherimportantthingtorememberisthatthepurposeofaSWOT
analysisistoassessyourorganization'scurrentposition.Therefore,as
theUniversityofKansasencourages,useyourSWOTtolookfora
"stretch,"notjusta"fit."
SWOTareoftenimproperlyusedtojustifycomplacencyandverify
currentpractices.IfyouareconductingaSWOTtoidentifyareasof
needand/orgrowth,itisimperativeyouusetheanalysistodiagnose
whereyoucan"stretch."

24. Thank you!
•Questions?