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gabonesedestructionSoftware and s/w Development

Feb 17, 2014 (3 years and 7 months ago)

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Chapter 3

SWOT: The Analysis of Strengths,
Weaknesses, Opportunities, & Threats

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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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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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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 1




SWOT analysis for each
product/market combination

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Search Extensively for
Competitors

Do not overlook any competitor (current or
future)

Consider:


Product competitors


Generic competitors


Total budget competitors



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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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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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Customer Segment Evaluations
Should be Benchmarked

Consider internal customers (employees)

Consider all relevant stakeholders:


Investors & stockholders


Suppliers


Customers


Governmental


Societal


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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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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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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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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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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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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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How to Achieve a Competitive
Advantage

Operational excellence
-
efficiency

Product leadership
-
research & development,
technology, products

Customer intimacy
-
relationship marketing

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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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Considerations in Developing
Marketing Goals

Attainability

Consistency

Comprehensiveness

Intangibility

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Considerations in Developing
Marketing Objectives

Attainability

Continuity

Timeframe

Assignment of responsibility

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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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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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How would you react to the idea that a
SWOT analysis is unnecessary?


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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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Identify some opportunities & threats
in the following industries…

Commercial aviation

Health care

Television

Pet supplies

Education

Transportation