SHUBHAM PARSEKAR PGDM2/1539

SWOT analysis Q.1. Describe what is meant by a SWOT

analysis.

Answer

“S” – Strength

“W” – Weakness.

“O” – opportunity

“T” – Threats.

“SWOT” is a strategic planning tool used to analyse the

external as well as the internal factors affecting a business.

The SWOT analysis provides information that is helpful in

matching the firm’s resources and capabilities to the

competitive environment in which it operates. As such, it is

instrumental in which it operates.

It is an important part of company’s planning process.

Environmental factors internal to the firm are Strengths and

Weakness, basically scanning within the company and

analysing what is their core competence and where their

weakness lies. Those factors external to the firm can be

classified as Opportunities, which the company has or area

that can be tapped upon and Threats, which are a serious risk

like competitors. so this analyses is called SWOT analyses.

SHUBHAM PARSEKAR PGDM2/1539

Q.2, Explain the difference between internal and

external factors.

Answer

differences between the internal and external factors associated with SWOT analysis.

Internal factors (strengths and weaknesses) are much more under the control of the organization. The organization can move people around, provide training, change how it uses other resources, and do other things internally to strengthen its ability to achieve objectives.

External factors (opportunities and threats) are far less under the organization's control and can have an impact on the internal factors. A threat to one organization is often an opportunity for another organization.

For example, the current economy is a threat to many organizations. How do you motivate employees when you are laying them off because consumers cannot afford to buy your products? It is an opportunity for organizations that can position themselves to provide services for people who are laid off or can outsource services to organizations that have undergone a layoff.

Q.3. Analyse ways in which IKEA has managed to

minimise threats to its business.

Answer –

1) Social Trends – The situation was that there was a slowdown

in first time buyers entering into the housing market , so they

were building a online help platform, where in it will help and

give ideas to customers to live a sustainable life and reduce

SHUBHAM PARSEKAR PGDM2/1539

their adverse impact on the environment. Trained staff

providing valuable suggestion and making aware as to the

customer , what IKEA is doing to sustain the environment and

ways to protect it i.e recycling and re-using of materials and

also various activities company is undertaking.

2)Market forces – In order to survive in the low price

household competitive market. They must try to use

technologies or employing specialized managers. Economies of

scale also give a business a competitive edge if cost savings

are then passed on the customers in the form of lower prices.

Q.4. Discuss the contribution of SWOT analyses to IKEA’s

growth.

SWOT analyses helped IKEA to grow by many ways such as, their strength is of Strong Global brand and increases use of the recycled material, which conveys the message that they are not causing any harm to environment , instead they are encouraging people to follow sustainable ways of saving energy. Also IKEA is training all its employees on ways to communicate company information about protecting environment is an important thing which will be a counter point to one of the weakness is to keep good communication with its customers and stakeholders. This also helped in retaining the first time buyers in housing market, as the employees as well as the website which the company has , displayed various activities , the company undergoes to indirectly build a good image. The threat here is recession will decrease the consumers spending and there will not be much sales , but the strength is a strong concept – based on offering a wide range of well designed, functional products at low prices.