Download - Week 5 Spring 2014
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Important Announcement & Lets
Breathe !!!
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Quiz 3 : Time (30 Minutes)Please
mention your complete Name and
Enrolment number.
Of
the
three
environments
that
we
discussed
last
time
,
Which
one
is
the
most
important
in
a
General
Sense?
Why?
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X
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Environment
SWOTPESTLEX
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Defining the SWOT?
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SWOT analysis (alternately SWOT Matrix) is
a strategic planning method used to evaluate
the Strengths, Weaknesses/Limitations, Opportun
ities, and Threats involved in a project or in
a business venture.(Wikipedia,2012)
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The SWOT !!! Developed in the 1960-70s
Credited to Albert Humphrey
From Stanford University
He Used Data from Fortune 500 Companies
Objectives are always set after conducting the
SWOT
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Strength Weaknesses
Opportunities Threats
Helpful Harmful
Internal
External
Source:( Xhienee, 2012)
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Strengths Brand Name
Industry Ranking
Patents and Processes
Management
Alliances
Employee Commitment
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Weaknesses Lack of Strategic Direction
Limited Financial Resources
Weak R & D Spending
Narrow Product Line
Limited Distribution Out of Date Product or Technology
Poor Marketing
Alliances with weak firms
Under Trained Employees
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Opportunities Market Growth
Rival Firms collapse /Complacent
Changing Customer Needs
Opening of Foreign Markets
New Segments
Economic Boom
New Technology
Government Deregulation
Demographic Shifts
New Distribution Method
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Threats Entry of Foreign Firms
Substitute Products
PLC Decline
Changing Customer Needs
Rival Firms adopt new Strategies
Increased Government Regulation
Economic Downturn
Foreign Trade Barriers
Poor Performance of Ally Firms
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Benefits of SWOT !!! Simple process which lowers costs
No extensive training required
Flexible-enhances strategic planning Integration-synthesizes qualitative & quantitative
information
Collaboration-encourages interdepartmentalcoordination
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Stay focused
Search extensively for competitors
Collaborate with other functional areas
Examine issues from the customers
perspectives
Separate internal issues from external issues
Directives for a Productive SWOT Analysis
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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.
Keys to Staying Focused
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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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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
Promotional
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Customer Segment Evaluations Should beBenchmarked
Consider internal customers (employees)
Consider all relevant stakeholders:
Investors & stockholders
Suppliers
Customers
Governmental
Societal
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SWOT-Driven Strategic Planning
Utilizing a SWOT for strategic planning requires:
Looking beyond the firmscurrent 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 cannotbe converted into strengths becomelimitations
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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 -sales force -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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Strategies Converting Strengths or Threats into
Opportunities
Find new markets for a firms products
(conversion strategy)
May require significant financial resources
Must identify major liabilities that continue tooccur
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Minimize or Avoid Weaknesses or ThreatsWhich 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 could each of the following be astrength 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
everyones needs
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10 Mins Break
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Classroom activity : Lets Develop a
SWOT
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See you next week!!!