SWOT ANALYSIS Matthew Gurto Christopher Anderson Robert Williams Kathryn Connelly 22 October 2007

Agenda Origins Importance Rules Analytical Process  Strengths  Weaknesses  Opportunities  Threats Limitations Class Exercise

Early Origins Of SWOT Sun-Tzu  2,000 Years Ago  “Know Your Enemy, Know Yourself, And Your Victory Will Not Be Threatened.” Sun Tzu Picture Source:

Modern Origins Of SWOT Analysis Stanford Research Institute:  Albert Humphrey  Funded By Fortune 500 Companies  Goal: Why Corporate Planning Failed  Case Study: 1100 Companies And Organizations Interviewed 250-Item Questionnaire 5,000+ Executives Participated  Creation Of SWOT Analysis

Importance Foundation For Nuanced And Insightful Decision Making Applied To Organizational Planning And Strategy Development Maximizes Potential Strengths And Opportunities Minimizes Weaknesses And Threats

Rules For Application Eliminate Biases  Although, It IS Subjective Distinguish Between Present Status And Future Consider Competitive Or Influencing Factors Competing Businesses Picture Source:

SWOT: An Analytical Process Align Internal With External  Internal = Strengths And Weaknesses  External = Opportunities And Threats  Consider Positive And Negative Effects Alignment Of Contributing Factors Picture Source:

Strengths Measurement Of Superior Capabilities  Development Of A Competitive Advantage Strategies Skills/Competencies Knowledge Resources Accept Others Perspectives  Walk In Different Shoes Picture Source:

Strengths Not A Strength If:  Shared With A Competitor  Not A Unique Characteristic Considerations:  Useful?  Innovative?  Significance?  Gain Or Loss?  Valuable?  Reliable?

Strengths- Business Questions:  What Advantages Does Your Company Have Over The Competition?  What Unique Or Lowest-Cost Resources Do You Have Access To?  What Are Your Assets Or Core Competencies?  Where Are You Making Money?  What Experience Does Your Business Have? Examples Of Specific Strengths:  Superior Product Performance Durability, Quality, Reliability New Innovations And Patented Products  Efficient Employee/Manufacturing Capacity  Development Of Brand Or Reputation  Strong Marketing And Sales Strategy  Availability And Location Of Products Or Services

Weaknesses Measurement Of Attributes That Deter Organization From Achieving Objectives Internally Focused  Both Internal External Viewpoints Both Short-Term And Long-Term Weaknesses Sometimes = Flip Side of Strengths

Weaknesses Questions To Ask:  What Could The Organization Improve?  What Should The Organization Avoid?  What Are Customers And Competitors Likely To See As Weaknesses? (External Viewpoint)  What factors lose an organization sales or business?

Possible Types Of Weaknesses:  Lack Of Patent Protection  Poor Reputation Among Customers  High Cost Structure  Lack Of Access To The Best Natural Resources  Lack Of Access To Key Distribution Channels  Lack Of Marketing Expertise  Undifferentiated Products Or Services (i.e. in relation to your competitors).  Location Of Your Business.  Poor Quality Of Goods Or Services Weaknesses - Business

Opportunities Examine Strengths And Weaknesses  Externally And Positively Focused New Situations/Circumstances  Favorable To Prospective Situations Supports Product Demand Or Service  Allows Company To Enhance Its Position

Opportunities Weaknesses for a market competitor are often opportunities for others Eliminate weaknesses and capitalize strengths  Strengths = opportunity? Factors which create opportunities:  Legal  Political  Technological  Cultural

Opportunities- Business Mergers, Joint Ventures Or Strategic Alliances New Attractive Market Segments  International Markets Loosening Of Regulations Capitalize On Competitors' Vulnerabilities Industry Or Lifestyle Trends Technology Development, Changes And Innovation Global Influences

Threats A Warning Of Impending Danger Speculative Assessment  Worst Case Scenarios External  No Control  Proactively Develop Contingency Plans

Threats Classify Types/Seriousness Of Threats Probability Of Occurring Recognizing Competition  …Always A Threat Ability To Forecast Change

Threats- Business Competitor’s Status Market Demand New Legislation Environmental Factors Negative Publicity Employee Dissatisfaction Technological Innovations Relationship With Resource Suppliers Picture Source:

Limitations Identifies, Does Not Create  Strategy And Objectives Remember…  It IS Subjective Represents Specific Point In Time Do Not Overextend Its Application

Class Application Picture Source:

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Thank You For Questions, Comments, Or A Copy Of The Slides:  Matthew Gurto:  Christopher Anderson:  Robert Williams:  Kathryn Connelly: