1. SWOT: The Analysis of Strengths, Weaknesses, Opportunities, & Threats
Chapter 3
SWOT: The Analysis of Strengths, Weaknesses, Opportunities, & Threats

2. Benefits of the SWOT Analysis…
Simple process which lowers costs
No extensive training required
Flexible-enhances strategic planning
Integration-synthesizes qualitative & quantitative information
Collaboration-encourages interdepartmental coordination
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3. Directives for a Productive SWOT Analysis…
Stay focused
Search extensively for competitors
Collaborate with other functional areas
Examine issues from the customers’ perspectives
Separate internal issues from external issues
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4. Keys to Staying Focused
Focus on specific products & markets
Adapt the marketing mix to address environmental issues
Examine overall strategic business units
Make certain you have SWOT analysis for each product/market combination
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5. Search Extensively for Competitors
Do not overlook any competitor (current or future)
Consider:
Product competitors
Generic competitors
Total budget competitors
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6. Collaborate with Other Functional Areas
Stimulates communication outside normal channels
Result is varied information from diverse sources
Provides an ‘outsiders’ perspective in the SWOT
Sales -Inventory control
Production -Quality control
Advertising -Research & development
Finance
Customer service
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7. Examine Issues from the Customers’ Perspectives in the SWOT
What do our customers believe about us as a company?
What are their perceptions of:
Product quality
Customer service
Price/value
Convenience
Promotional
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8. Customer Segment Evaluations Should be Benchmarked
Consider internal customers (employees)
Consider all relevant stakeholders:
Investors & stockholders
Suppliers
Customers
Governmental
Societal
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9. Concerns Beyond External Issues
Internal issues (strengths & weaknesses)
Biggest problem with SWOTS
failure to understand the difference between internal & external issues
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10. The Elements of the SWOT Analysis
Strengths & Weaknesses:
A strength is meaningful only when it addresses customer needs
A customer-focused SWOT can uncover potential weaknesses
Weaknesses associated with customer needs should be minimized
Determine where resources are available & lacking
Match strengths with market opportunities
Strengthen weaknesses or minimize their negatives
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11. The Elements of the SWOT Analysis
Opportunities & Threats:
Changes in the external environment can impede the ability to deliver value to customers
Changes can occur in:
market growth
competition
overall economy
political/legal environment
technology
sociocultural issues
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12. SWOT-Driven Strategic Planning
Utilizing a SWOT for strategic planning requires:
Looking beyond the firm’s current products
Matching strengths with opportunities (translate strengths into capabilities)
Investing in key areas: customer support, R&D, promotion, employee training)
Converting weaknesses into strengths
Understanding that weaknesses that cannot be converted into strengths become limitations
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13. One Way to Conduct a SWOT Analysis-SWOT Matrix
4 cells categorizing the SWOT:strengths, weaknesses, opportunities & threats
Assess magnitude and importance of each
Based on customer perceptions, not managers
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14. Developing Sustainable Competitive Advantages
Capabilities allow the firm to better serve customer needs (competitive advantage)
Sources of competitive advantage:
customer loyalty -brand equity -distribution
patents & trademarks -salesforce -culture
Capabilities that do not solve customer needs are of little value
Must have a core competency
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15. How to Achieve a Competitive Advantage
Operational excellence-efficiency
Product leadership-research & development, technology, products
Customer intimacy-relationship marketing
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16. Matching Strengths to Opportunities (Johnson & Murphy)
2 key strengths: reputation for quality & personal service
2 key opportunities: demand for high quality products & good service
J & M uses a product leadership strategy & customer intimacy strategy
J & M stresses convenience of locations & catalog services (overnight delivery options)
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17. Considerations in Developing Marketing Goals
Attainability
Consistency
Comprehensiveness
Intangibility
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18. Considerations in Developing Marketing Objectives
Attainability
Continuity
Timeframe
Assignment of responsibility
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19. Strategies Converting Strengths or Threats into Opportunities
Find new markets for a firm’s products (conversion strategy)
May require significant financial resources
Must identify major liabilities that continue to occur
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20. Minimize or Avoid Weaknesses or Threats Which Cannot Be Converted
Become a niche marketer
Reposition the product
Realize your limitations
Diversify to minimize risks of operating in a single market
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21. How would you react to the idea that a SWOT analysis is unnecessary?
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22. How could each of the following be a strength or weakness?
Highest quality product in the industry
Significant excess production capacity
Excellent relationship with a single supplier
Sizable amount of cash on hand
Offering a product that is designed to suit everyone’s needs
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23. Identify some opportunities & threats in the following industries…
Commercial aviation
Health care
Television
Pet supplies
Education
Transportation
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