1. Situational Analysis
SWOT Analysis

2. What is SWOT Analysis?
A structured assessment of the fit between what an organization can (strengths) and cannot (weaknesses) presently do, and the environmental conditions working for (opportunities) and against (threats) the firm.

3. Major Benefits Simple to use. Reduces costs of strategic planning.
Flexible.
Integrates and synthesizes diverse information.
Fosters collaboration among managers of different functional areas.

4. To be effective: Stay focused on specific product/market.
Don’t overlook any information.
Collaborate with other functional areas.
Examine issues from customers’ perspective.
Separate internal issues from external issues.

5. Potential Strengths Abundant financial resources
Any distinctive competence
Market leader
Economies of scale
Proprietary knowledge
Patented processes
Lower costs
Good marketing image
Superior mgr. talent
Better mkt skills
Product quality
Partnerships with other firms
Distribution skills
Committed employees

6. Potential Weaknesses Lack of strategic direction Weak spending on R&D
Very narrow product line
Limited distribution
Higher costs
Out-of-date products
Internal operating problems
Weak market image
Poor marketing skills
Limited mgmt skills
Undertrained employees

7. Potential Opportunities
Rapid market growth
Rival firms are complacent
Changing customer needs/tastes
Opening of foreign markets
Mishap of rival firm
New product uses
Economic boom
Deregulation
New technology
Demographic shifts
Other firms seeking alliances
High brand switching
Sales decline for a substitute
New distribution methods

8. Potential Threats Entry of foreign competition
Introduction of new substitutes
Product life cycle in decline
Changing customer needs/tastes
Rival firms adopt new strategies
Increased regulation
Recession
New technology
Demographics shifts
Foreign trade barriers
Poor performance of ally firm

9. An example….

10. Analysis of SWOT Matrix

11. Matching Strengths to Opportunities
Creates competitive advantage.
Operational excellence
Product leadership
Customer intimacy
Provides guidance on how the firm might structure marketing strategy to convert weaknesses and threats and minimize/avoid those weaknesses and threats that cannot be converted.