Page 41 - Strategic Management

Strategic Management 8 SWOT Analysis

8 SWOT Analysis

8.1 Introduction SWOT Analysis -definition

SWOT Analysis means the internal Strengths and Weaknesses and external Opportunities and Threats of an organisation.

8.2 Explanation

The central purpose of the SWOT analysis is to identify strategies that align, fit or match an organisation’s resources and
capabilities to the demands of the environment in which the organisation competes.

To put it another way, the purpose of the strategic alternatives generated by a SWOT analysis should be to build on
organisation strengths in order to exploit opportunities and counter threats and to correct organisational weaknesses.

Strategic choice is the process of choosing among the alternatives generated by a SWOT analysis. The organisation has to
evaluate various alternatives against each other with respect to their ability to achieve major goals. The process of strategic
choice requires the organisation to identify the set of business-level, functional-level and corporate-level, strategies that
would best enable it to survive and prosper in the fast-changing environment that is a feature of modern business.

8.2.1 Strengths.

• Core competencies in key areas.
• Adequate financial resources.
• Well-thought-of by buyers.
• An acknowledged market leader.
• Well-conceived functional area strategies.
• Access to economies of scale.
• Insulated (at least somewhat) from strong competitive pressures.
• Proprietary technology.
• Cost advantages.
• Better advertising campaigns.
• Product innovation skills.
• Proven management.
• Ahead on experience curve.
• Better manufacturing capability.
• Superior technological skills.

8.2.2 Weaknesses
• No clear strategic direction.
• Obsolete facilities.
• Profitability issues because…

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