SWOT ANALYSIS

1. SWOTANALYSIS
THREAT
Alexander the Great once said: “An army of sheep
led by a lion, can defeat an army of lions led by a
sheep.the ability to unite people is powerful beyond
measure. There is a lion in each an everyone of us.”
These principles (or tool) can be applied to
personal life, businesses, organization or a
country as a whole; to solve problems, take
decisions, implement a policy or carryout a
developmental project in order to achieve the
most excellent results, outcomes or goals.
SWOT ANALYSIS
STRENGTH
WEAKNESS
OPPORTUNITY

2. SWOT ANALYSIS
EXTERNAL
STRENGTH WEAKNESS
OPPORTUNITY THREAT
POSITIVE NEGATIVE
INTERNAL

3. SWOT ANALYSIS
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Identification.
Prioritization.
How to perform the analysis.
Guidlines for successful SWOT.
Typical Examples.

4. SWOT ANALYSIS
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S- STRENGTH
Identify your strengths, focus well on them
and consolidate them.
What are the things you have, know how to
do best and confident of?
Hold on to them and keep a firm hold;
make regular improvements.
To allow yourself to loose them is
disatrous.
1.0 IDENTIFICATION

5. SWOT ANALYSIS
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W-WEAKNESS
Identify your weak points:
Develop habits and tactics to minimise, eliminate
and do away with them completely.
Be very keen and sincere to yourself;
what are the things that you do that you are not
suppose to do.
what are the things you neglect and suppose to do.
so ensure you avoid lapses to a very high extent.
Do not be too careless about them.

6. SWOT ANALYSIS
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O- OPPORTUNITY
Look out for opportunities.
These are external from other sources, also
contribute immensely to development and
progress.
Mind you, look for truly great opportunities.
Hang around with people who would lift you high,
people who truly loves you and really want your
progress.
This will provide you with incentives and life
lines that will lift you higher.

7. SWOT ANALYSIS
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T-THREAT
Watch out for threats; shine your eyes.
Use all your sense organs (seven senses) to
know your true friends and enemies, lovers and
well wishers.
Be very careful and watchful of your enemies,
they may disguise, but on a very slight
opportunity they would try to slice you at the
back.
Some friends could also be threats, may be
more dangerous than enemies.

8. SWOT ANALYSIS
2.0 PRIORITIZATION
Strengths and weaknesses are evaluated on 3 categories:
Importance: Importance shows how important a strength or a weakness is for the
organization in its industry as some strengths (and/or weaknesses) might be more
important than others. A number from 0.01 (not important) to 1.0 (very important)
should be assigned to each strength and weakness. The sum of all weights should
equal 1.0 (including strengths and weaknesses). This is base on how much impact
this factors have on the organization.
Rating: A score from 1 to 3 is given to each factor to indicate whether it is a major (3) or a
minor (1) strength for the company. The same rating should be assigned to the
weaknesses where 1 would mean a minor weakness and 3 a major weakness.
Score: Score is a result of importance multiplied by rating. It allows prioritizing the
strengths and weaknesses. You should rely on your most important strengths and try
to combat or defend your weakest parts of the organization.

9. SWOT ANALYSIS
 Opportunities and threats are prioritized slightly differently than
strengths and weaknesses.
Their evaluation includes:
Importance: It shows to what extent the external factor might impact
the business. Again, the numbers from 0.01 (no impact) to 1.0 (very
high impact) should be assigned to each item. The sum of all
weights should equal 1.0 (including opportunities and threats).
Probability: Probability of occurrence is showing how likely the
opportunity or threat will have any impact on business. It should be
rated from 1 (low probability) to 3 (high probability).
Score: Importance multiplied by probability will give a score by which
you’ll be able to prioritize opportunities and threats. Pay attention to
the factors having the highest score and ignore the factors that will
not likely affect your business.

10. SWOT ANALYSIS
3.0 How to Perform the Analysis
SWOT can be done by one person or a group of members that are directly responsible for
the situation assessment in the company.
Basic swot analysis is done fairly easily and comprises of only few steps:
Step 1. Listing the firm’s key strengths and weaknesses
Step 2. Identifying opportunities and threats
Strengths and Weaknesses
Strengths and weaknesses are the factors of the firm’s internal environment. When
looking for strengths, ask what do you do better or have, more valuable than your
competitors have? In case of the weaknesses, ask what could you improve and at least
catch up with your competitors?
Where to look for them
Some strengths or weaknesses can be recognized instantly without deeper studying of
the organization. But usually the process is harder and managers have to look into the
firm’s:
Resources: land, equipment, knowledge, brand equity, intellectual property, etc.
Core competencies
Capabilities
Functional areas: management, operations, marketing, finances, human resources and
R&D
Organizational culture
Value chain activities

11. SWOT ANALYSIS
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Strength or a weakness?
Often, company’s internal factors are seen as both, strengths and weaknesses, at the
same time. It is also hard to tell if a characteristic is a strength (weakness) or not. For
example, firm’s organizational structure can be a strength, a weakness or neither! In
such cases, you should rely on:
Clear definition: Very often factors which are described too broadly may fit both strengths
and weaknesses. For example, “brand image” might be a weakness if the company
has poor brand image. However, it can also be a strength if the company has the most
valuable brand in the market, valued at $100 billion. Therefore, it is easier to identify if
a factor is a strength or a weakness when it’s defined precisely.
Benchmarking: The key emphasis in doing swot is to identify the factors that are the
strengths or weaknesses in comparison to the competitors. For example, 17% profit
margin would be an excellent margin for many firms in most industries and it would
be considered as a strength. But what if the average profit margin of your competitors
is 20%? Then company’s 17% profit margin would be considered as a weakness.
VRIO framework: A resource can be seen as a strength if it exhibits VRIO (valuable, rare
and cannot be imitated) framework characteristics. Otherwise, it doesn’t provide any
strategic advantage for the company.

12. SWOT ANALYSIS
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Opportunities and threats
Opportunities and threats are the external uncontrollable factors that usually appear
or arise due to the changes in the macro environment, industry or competitors’ actions.
Opportunities represent the external situations that bring a competitive advantage if
seized upon. Threats may damage your company so you would better avoid or defend
against them.
Where to look for them?
PESTEL. PEST or PESTEL analysis represents all the major external forces (political,
economic, social, technological, environmental and legal) affecting the company so
it’s the best place to look for the existing or new opportunities and threats.
Competition: Competitor’s react to your moves and external changes. They also
change their existing strategies or introduce new ones. Therefore, the company must
always follow the actions of its competitors as new opportunities and threats may
open at any time.
Market changes: The most visible opportunities and threats appear during the market
changes. Markets converge, starting to satisfy other market segment needs with the
same product. New geographical markets open up allowing the firm to increase its
export volumes or start operations in a new country. Often niche markets become
profitable due to technological changes. As a result, changes in the market create new
opportunities and threats that must be seized upon or dealt with if the company
wants to gain and sustain competitive advantage.

13. SWOT ANALYSIS
Opportunity or threat?
Most external changes can represent both opportunities and threats. For
example, exchange rates may increase or reduce the profits gained from
exports. This depends on the exchange rate, which may rise (opportunity)
or fall (threat) against the home country currency. The organization can
only guess the outcome of the change and count on analysts’ forecasts.
In such cases, when organization cannot identify if the external factor
will affect it positively or negatively, it should gather unbiased and
reliable information from the external sources and make the best
possible judgement.

14. SWOT ANALYSIS
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Guidelines for successful SWOT
The following guidelines are very important in writing a successful
swot analysis. They eliminate most of swot limitations and improve
it's results significantly:
Factors have to be identified relative to the competitors. It allows
specifying whether the factor is a strength or a weakness.
List between 3 – 5 items for each category. Prevents creating too
short or endless lists.
Items must be clearly defined and as specific as possible. For
example, firm’s strength is: brand image (vague); strong brand
image (more precise); brand image valued at $10 billion, which is
the most valued brand in the market (very good).
Rely on facts not opinions. Find some external information or
involve someone who could provide an unbiased opinion.
Factors should be action orientated. For example, “slow introduction
of new products” is action orientated weakness.

15. SWOT ANALYSIS
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SWOT analysis example A
This is a basic example of the analysis:
SWOT analysis of Company "A"
Strengths
Second most valuable brand in the world valued at $76 billion
Diversified income (5 different brands earning more than $4 billion each)
Strong patents portfolio (15,000 patents)
Investments in R&D reaching 4 billion a year.
Competent in mergers & acquisitions
Have an access to cheap cash reserves
Effective corporate social responsibility (CSR) projects
Localized products
Highly skilled workforce
Economies of scale or economies of scope
Weaknesses
Investments in R&D are below the industry average
Very low or zero profit margins
Poor customer services
High employee turnover
High cost structure
Weak brand portfolio
Rigid (bureaucratic) organizational culture impeding fast introduction of new products
High debt level ($3 billion)
Brand dilution (the firm has too many brands)
Poor presence in the world's largest markets

16. SWOT ANALYSIS
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Opportunities
Market growth for the main firm's product
Growing demand for renewable energy
New technology, that would drive production costs by 20% is in development
Our country accession to EU
Changing customer habits
Disposable income level will increase
Government's incentives for 'specific' industry
Economy is expected to grow by 4% next year
Growing number of people buying online
Interest rates falling to 1%
Threats
Corporate tax may increase from 20% to 22% in 2013
Rising pay levels
Rising raw material prices
Intense competition
Market is expected to grow by only 1% next year indicating market saturation
Increasing fuel prices
Aging population
Stricter laws regulating environment pollution
Lawsuits against the company
Currency fluctuations

17. SWOT ANALYSIS
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Further Readings
managementstudyguide.com
PMI PMBOK
www.businessnewsdaily.com/4245-swot-
analysis.html
www.swotanalysis.com
Pickton, D.W. and Wright, S. (1998). What’s
swot in strategic analysis? Strategic
Change Vol. 7, pp. 101-109, 105-106