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SWOT analysis is a very common and useful strategic planning tool. It is simply an acronym for Strengths, Weaknesses, Opportunities and Threats. Its an exercise often used by the team tasked with putting together the strategic plan to explore Strenghts and weaknesses of a company that are often called internal drivers as well as Opportunities and Threats that are called external drivers.

Since strengths and weaknesses come from within the organization, the strategic planning team members will be able to identify them in the interview process or perhaps in a brainstorming session set up for that purpose.The facilitator may choose to ask the members to identify strengths and weaknesses directly, or may choose to simply pull them from the interview data and list them as planning assumptions in the executive summary.

Opportunities and threats are harder to identify. Ideally, the leader should ask few subject matter experts to address the strategic planning team on relevant subjects prior to the off-site. A relevant subject is one pertaining to the organization’s strategic goals. The reason this is not done during the initial planning session is because the planning team has not yet identified what is important, i.e., their strategic goals.

What is meant by opportunities and threats?

Theoretically, anything outside the organization that impacts its future, such as actions by Congress, new laws passed..etc. But, unless they are limited to the vital few, the group may never get past the analysis stage. The vital few opportunities and threats are those that directly relate to the business the organization is in—those that, if changed today, would alter the way it does business, i.e., create a paradigm shift.

Why is a SWOT analysis important?”

Once the team reaches consensus on its strengths, weaknesses, opportunities, and threats, they will want to develop new goals that will allow the organization to maximize its position relative to each. Think of this as a tune up and alignment for the company's strategy it will help identify where we are right now and which path should we be heading.

SWOT Analysis – Generic Template

  Strengths
S1- Strong R & d
S2- Dealers Force
S3- Low Cost
Weaknesses
W1- Customer Complaints
W2- Long Cycle Time
W3- Service Recovery
Opportunities
O1- Growing Market
O2- Positive Brand Image
O3-Moving to High Tech
SO Strategies:
Use internal strengths to take advantage of external opportunities
WO Strategies:
Improve internal weakness and take advantage of external opportunities
Threats
T1- Economic Slow Down
T2-AFTA
T3 – Buyer’s Market
ST Strategies:
Use internal strength to avoid or reduce the impact of external threats
WT Strategies:
Defensive tactics: Reduce internal weakness, Avoid environmental threats. A firm faced with external threats and internal weakness may indeed be in a precarious position


SWOT Analysis – Typical example of Strategies - 1

  Strengths
S1- Strong R & d
S2- Dealers Force
S3- Low Cost
Weaknesses
W1- Customer Complaints
W2- Long Cycle Time
W3- Service Recovery
Opportunities
O1- Growing Market
O2- Positive Brand Image
O3-Moving to High Tech
SO Strategies:
S1O1: Develop New Product ahead of competitor for growing market
WO Strategies:
W1O2: Setup Customer Enhancement Initiative to Improve Brand Image
Threats
T1- Economic Slow Down
T2-AFTA
T3 – Buyer’s Market
ST Strategies:
S2T2: Strengthen Dealers for Asian (Open) Market
WT Strategies:
W2T1: Improve Cycle Time to Attract New Customer

SWOT Analysis – Typical example of Strategies - 2

  Strengths
S1-  Experience Workforce
S2- Financially Sound
S3- Production Flexibility
S4- Strong External Mgmt Support
S5- Wide Product Range
Weaknesses
W1- High Changeover
W2- Lack Technical Competency
W3- Limited Capacity
W4- Weak Appraisal System
W5- Limited Sourcing
Opportunities
O1- AFTA By 2003
O2- Competitive Pricing
O3- High Margin on Small Volume Counters
04- Cash and Quantity Discount
SO Strategies
S1O1- Penetrates to Asian Countries by Experienced Workforce
S1O2- Unit Cost Reduction Driven by Experience
S2O4- Pay Cash to Enjoy Cash
S303- Production Flexibility
S5O1- Wide Product Range
WO Strategies
W1O2-  Product Focus to Achieve Low Unit Cost
W2O1-
Threats
T1- Sole Supplier
T2-Lost Market Share Due to Product Substitution
T3-Downstream Industries
T4- Rapid Growth in Bopp Attract New Competitors
T5-Lost Market Share due to Inconsistent Quality and Poor OTD
ST Strategies
S1T1
Wt Strategies
W1T1

 

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