SWOT Analysis
Introduction
SWOT analysis is a strategic planning method used to evaluate
the Strengths, Weaknesses, Opportunities, and Threats involved
in a business.
It involves specifying the objective of the business and identifying
the internal and external factors that are favorable and
unfavorable to achieve that objective.
Technique is credited to Albert Humphrey.
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SWOT
• Positive • Negative
Internal
Strengths Weaknesses
Opportunities Threats
External
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What is SWOT Analysis?
It is a non-financial planning tool.
It links the analysis in terms of advantages and disadvantages; and
the internal and external business environment (in a matrix
format).
The Strengths and Weaknesses are defined by measures such as
market share, loyal customers, level of customer satisfaction and
product quality.
Opportunities are new potential areas for business in the future,
such as new markets, or new conditions in existing markets.
Threats describe how the competition, new technology, or other
factors in the business environment may affect the business's
development.
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What is SWOT Analysis?.....Cont
SWOT Analysis is a powerful
technique for understanding
your Strengths and
Weaknesses, and for looking
at the Opportunities and
Threats you face.
For a business to Expand,
Diversify and Sustain in the
market SWOT analysis is
must.
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Matching and Converting
Another way of utilizing SWOT is matching and
converting.
Matching is used to find competitive advantages by
matching the strengths to opportunities.
Converting is to apply conversion strategies to convert
weaknesses or threats into strengths or opportunities.
An example of conversion strategy is to find new
markets.
If the threats or weaknesses cannot be converted a
company should try to minimize or avoid them.
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STRENGHTS
good capabilities
capacities of producing good products
products
technologies
R&D efforts
human resources
demand from the client
amount of knowledge
technical skills
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WEAKNESS
product mass become obsolete
technology has become obsolete
key management power may not be there
key man power may not be there
The point is not that the company is having weaknesses
and that the company should closedown; the best part is
that whether this company is able to trace this weakness
and take the corrective measures or not.
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OPPORTUNITIES
a company can identify new products
the company can go for new sectors
the company can go for new geography
new economy - the company can go and extend their
market
company can take the advantage of the changing
lifestyle
can go for the opportunities available technology
changing
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THREATS
political threats
legislative threat
environmental threat
technology threat
from the partners
joint venture alliances
from the buyers
from the suppliers
from the key staff
How the company is take the advantage - take care of these threats
and go for a counter actions so that the threats are minimized.
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Three stages of a SWOT analysis
Identify.
Draw conclusions.
Translate into strategic action.
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Advantages of SWOT Analysis
Consolidate strengths
Minimises Weaknesses
Helps to Grab Opportunities
Minimises Threats
Facilitates Planning
Facilitates Alternative Choices
Helps to Innovate
Ensure Survival & Success
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Nirma chemicals ltd.
Nirma was a basic detergent with no color, design
or sophistication on the pack the product
Was priced at around 35% of surf.
Price, medium quality, distribution reach and
effective use of media.
Market share grew from 0% in 1976 to about 60%
in 1987 in over a period of ten years
It has become the largest selling brand and the
success of Nirma is due to affordable price
The title 'NIRMA GIRL' going round and round on
her feet makes a strong impact for the brand
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Nirma: SWOT Analysis
STRENGTH :-
Strong brand equity.
Nirma is a Rs.17 billion umbrella brand offering
consumers a brand portfolio of products at multiple
price points in detergents, soaps & personal care market.
Market leadership in detergents and fabric wash.
Second largest player in toilet soaps.
Has wide distribution network.
Its strategy of rural marketing is its unbeatable strength.
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Nirma: SWOT Analysis
WEAKNESSES:-
high interest burden.
less presence in premium segment.
lacks global tie up
and thus finds hard to tap export markets.
OPPURTUNITIES:-
exports.
acquisitions for strengthening its distribution
tie-ups.
entry into other categories like shampoos,
toothpastes and fabric whiteners.
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Nirma: SWOT Analysis
THREATS:-
MNCs are approaching Indian markets.
emergence of small but strong regional players.
brand name products have greater influence over it.
Nirma has been able to niche for itself in the face of
intense MNC competition
NIRMA's achievement is surely something about which
an Indian can be proud of brand that has lived up to its
catch line; BETTER PRODUCTS, BETTER VALUE, BETTER
LIVING...!
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Example-1
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Example-2: Healthcare
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Example-3
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