problems and prospects of swot analysis on marketing planning
TRANSCRIPT
PROBLEMS AND
PROSPECTS OF
SWOT ANALYSIS
ON MARKETING
PLANNING
1
BY
………………………………..
COLLEGE OF ACCOUNTANCY AND COMPUTER
TECHNOLOGY
Block B, Flat 8, Masoje Estate. PTI Road Effurun. Delta
State. Nigeria.
(AKP/WRR/BMG/BUS/HND2007…………)
A RESEARCH PROJECT WRITTEN IN THE DEPARTMENT OF
BUSINESS ADMINISTRATION, SCHOOL OF BUSINESS
STUDIES. SUBMITTED
IN PARTIAL FULFILMENT FOR THE AWARD OF HIGHER
NATIONAL DIPLOMA (HND) IN BUSINESS
ADMINISTRATION.
NOVEMBER 2009
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CERTIFICATION
We certify that this work was carried out by ………………………
in the School of Business Studies, department of Business
Administration, for the award of higher national diploma in
Business Administration.
__________________ ________________ (Supervisor) Centre Co-ordinator
Date __________ Date __________
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DEDICATION
I dedicate this project to Almighty God for his divine guidance,
grace and mercy throughout my academic pursuit. May all
Glory, Honour, Majesty and power be ascribed unto His Holy
Name in Jesus Name.
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ACKNOWLEDGEMENT
I am most grateful to the Almighty God for giving me life,
strength and courage to sail through my educational career
despite all odds and obstacles.
In writing this project, I am indebted to my wife, Mrs Favour
Ubido for her contributions; support and encouragement in
making this project work a success.
I will like to use this opportunity to express my sincere thanks
to my brothers and sisters, relatives, friends and loved ones for
their prayers, moral and financial support through this program.
My profound gratitude goes to my Supervisor Mr Victor
Udofot who despite his crowded schedule, sacrificed time to
read through the manuscript without which this project would
not have seen the light of the day.
My special thanks also goes to my course mates for their
advice, encouragement and assistance.
In like manner, I wish to acknowledge the effort of all my
lecturers for their principal knowledge imparted on me during
my period of study.
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With special thanks to school management team for their
endless love shown to me during the course of my studies.
Finally, thanks to others I cannot remember during the course
of the write up, may God reward every effort of kindness and
love shown during my academic pursuit.
ABSTRACT
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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 strategy formulation and selection
In this project, attempt was made to examine problems and
prospect of swot analysis on marketing planning.
The writer critically looked into the short comings/impact of
swot analysis , which lead to the establishment of the
objectives of the company under consideration which included;
generating enough surplus to pay back the invested capital to
the investors as early as possible.
To generating surplus for — (i) Expansion, (ii) Improvement of
quality, (iii) Increasing efficiency through introducing new
technology, (iii) Innovative marketing to reach the deeper
layers of low-income people and disadvantaged communities
and (v) Undertake research and experimentation to improve
and diversify products and services.
In order to arrive at a conclusive decision on the above
objectives the writer carried out an empirical survey and library
research from which the various data were obtained. Based on 7
the data, two hypothesis formulated by the researcher was
tested using Chi-square analysis to arrive at a better
conclusion. The hypothesis testing was based on primary data
while the secondary data were further analyzed to portray the
state of affairs at various periods.
CHAPTER ONE
INTRODUCTION
1.0 THE BACKGROUND OF THE STUDY
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SWOT being the acronym for Strengths, Weaknesses, Opportunities and
Threats. It is a simple, much-used technique which can help to prepare
or amend plans, in problem solving and decision making.
SWOT analysis came from the research conducted at Stanford Research
Institute from 1960-1970. The background to SWOT stemmed from the
need to find out why corporate planning failed. The research was funded
by the fortune 500 companies to find out what could be done about this
failure. The Research Team were Marion Dosher, Dr Otis Benepe, Albert
Humphrey, Robert Stewart, Birger Lie.
It all began with the corporate planning trend, which seemed to appear
first at Du Pont in 1949. By 1960 every Fortune 500 company had a
'corporate planning manager' (or equivalent) and 'associations of long
range corporate planners' had sprung up in both the USA and the UK.
However a unanimous opinion developed in all of these companies that
corporate planning in the shape of long range planning was not working,
did not pay off, and was an expensive investment in futility.
It was widely held that managing change and setting realistic objectives
which carry the conviction of those responsible was difficult and often
resulted in questionable compromises.
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The fact remained, despite the corporate and long range planners, that
the one and only missing link was how to get the management team
agreed and committed to a comprehensive set of action programmes.
To create this link, starting in 1960, Robert F Stewart at SRI in Menlo
Park California lead a research team to discover what was going wrong
with corporate planning, and then to find some sort of solution, or to
create a system for enabling management teams agreed and committed
to development work, which today we call 'managing change'.
The research carried on from 1960 through 1969. 1100 companies and
organizations were interviewed and a 250-item questionnaire was
designed and completed by over 5,000 executives. Seven key findings
lead to the conclusion that in corporations chief executive should be the
chief planner and that his immediate functional directors should be the
planning team. Dr Otis Benepe defined the 'Chain of Logic' which
became the core of system designed to fix the link for obtaining
agreement and commitment.
1. Values
2. Appraise
3. Motivation
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4. Search
5. Select
6. Programme
7. Act
8. Monitor and repeat steps 1 2 and 3
We discovered that we could not change the values of the team nor set
the objectives for the team so we started as the first step by asking the
appraisal question ie what's good and bad about the operation. We
began the system by asking what is good and bad about the present and
the future. What is good in the present is Satisfactory, good in the future
is an Opportunity; bad in the present is a Fault and bad in the future is a
Threat. This was called the SOFT analysis.
When this was presented to Urick and Orr in 1964 at the Seminar in Long
Range Planning at the Dolder Grand in Zurich Switzerland they changed
the F to a W and called it SWOT Analysis.
SWOT was then promoted in Britain by Urick and Orr as an exercise in
and of itself. As such it has no benefit. What was necessary was the
sorting of the issues into the programme planning categories of:
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1. Product (what are we selling?)
2. Process (how are we selling it?)
3. Customer (to whom are we selling it?)
4. Distribution (how does it reach them?)
5. Finance (what are the prices, costs and investments?)
6. Administration (and how do we manage all this?)
The second step then becomes 'what shall the team do' about the issues
in each of these categories. The planning process was then designed
through trial and error and resulted finally in a 17 step process beginning
with SOFT/SWOT with each issue recorded separately on a single page
called a planning issue.
The first prototype was tested and published in 1966 based on the work
done at 'Erie Technological Corp' in Erie Pa. In 1970 the prototype was
brought to the UK, under the sponsorship of W H Smith & Sons plc, and
completed by 1973. The operational programme was used to merge the
CWS milling and baking operations with those of J W French Ltd.
The process has been used successfully ever since. By 2004, now, this
system has been fully developed, and proven to cope with today's
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problems of setting and agreeing realistic annual objectives without
depending on outside consultants or expensive staff resources.
1.1 OBJECTIVES OF THE STUDY
It would have been a total waste of time, efforts, energy and of course
fund, in conducting this research if it was not meant to achieve any
meaningful objectives. The research would also have been seen as a
fruitless exercise if there were no fundamental objectives to be achieved
at the end of the study. The major objective of the study therefore was:
Unveiling the problems and prospects of SWOT analysis on marketing
planning. While the subsidiary objectives provides:
a framework for identifying and analysing strengths, weaknesses,
opportunities and threats
an impetus to analyse a situation and develop suitable strategies
and tactics
a basis for assessing core capabilities and competences of
business plan.
the evidence for, and cultural key to, change in organisation
a stimulus to participation in a group experience.
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1.2 THE SIGNIFICANCE OF THE STUDY
The researcher has no doubt whatsoever, that the findings and
conclusion presented and offered respectively in this study, will be of
immense benefit to the following categories of people among others:
(i) POLICY MAKERS OR FORMULATORS
Makers or formulators of policies, economic planners, and economic
advisers to the chief executives, will find the recommendation in this
study very useful in the performance of their respective duties.
This is so because they (policy makers economic planners) can use the
research report as a guide while formulating some important
policies.
(ii) OTHER RESEARCHERS
Other researchers can also use the work as a reference material where
and when necessary.
(iii) RESEARCH STUDENTS
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Research students will equally find the findings and conclusion offered in
this study very useful for further research and for reference purposes,
especially if they (students) are researching into a related area.
1.3 LIMITATION OF THE STUDY
Research work is subject to one form of limitation or the other, mine is
not an exemption.
It was the initial thought of the researcher that the exercise was easy but
the contrary was the case. As a student, several academic demands
compete with the limited but precious time available. This implies that
none of the competing exercise could be effectively handled without the
others being worse off.
This was my situation. Although the time expended was too small to do
justice to the study. The opportunity cost in terms of other equally
important activities forgone or cursorily attended to, was made.
The researcher faces some embarrassment arising from low-level
educated staff of the company completing the questionnaire who could
not understand the essence of the research work as this.
1.4 HYPOTHESIS
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It is a conjectural statement of the relationships between two or more
variables. It is testable, tentative problem explanation of the relationship
between two or more variables that create a state of affairs or
phenomenon.
E,C, Osuola (1986 page 48) said hypothesis should always be in
declarative sentence form, and they should relate to them generally or
specially variable to variables.
HYPOTHESIS THUS:
1. Explain observed events in a systematic manner
2. Predict the outcome of events and relationships
3. Systematically summarized existing knowledge.
In essence, there exist NULL HYPOTHESIS set up only to nullify the
research hypothesis and the ALTERNATIVE HYPOTHESIS for the purpose
of the study. For the efficiency of the study, the hypothesis is as follows:
Null Hypothesis (HO)
1. The usefulness of SWOT analysis is limited to profit-seeking
organizations.
2.` The greatest strength of SWOT is not its greatest weakness:
flexibility.
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Alternative Hypothesis (HI)
1. The usefulness of SWOT analysis is not limited to profit-seeking
organizations.
2. The greatest strength of SWOT is also its greatest weakness: flexibility.
1.5. STATEMENT OF RESEARCH PROBLEM
The aim of any SWOT analysis is to identify the key internal and external
factors that are important to achieving the objective. These come from
within the company's unique value chain. SWOT analysis groups key
pieces of information into two main categories:
Internal factors – The strengths and weaknesses internal to the
organization.
External factors – The opportunities and threats presented by the
external environment to the organization. - Use a PEST or PESTLE
analysis to help identify factors
The internal factors may be viewed as strengths or weaknesses
depending upon their impact on the organization's objectives. What may
represent strengths with respect to one objective may be weaknesses
for another objective. The factors may include all of the 4P's; as well as
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personnel, finance, manufacturing capabilities, and so on. The external
factors may include macroeconomic matters, technological change,
legislation, and socio-cultural changes, as well as changes in the
marketplace or competitive position. In considering the statement of the
research problem, the following questions comes to mind
Strengths:
What advantages does your company have?
What do you do better than anyone else?
What unique or lowest-cost resources do you have access to?
What do people in your market see as your strengths?
What factors mean that you "get the sale"?
Consider this from an internal perspective, and from the point of view of your
customers and people in your market. Be realistic: It's far too easy to fall prey
to "not invented here syndrome". (If you are having any difficulty with this, try
writing down a list of your characteristics. Some of these will hopefully be
strengths!)
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In looking at your strengths, think about them in relation to your competitors -
for example, if all your competitors provide high quality products, then a high
quality production process is not a strength in the market, it is a necessity.
Weaknesses:
What could you improve?
What should you avoid?
What are people in your market likely to see as weaknesses?
What factors lose you sales?
Again, consider this from an internal and external basis: Do other people seem
to perceive weaknesses that you do not see? Are your competitors doing any
better than you? It is best to be realistic now, and face any unpleasant truths
as soon as possible.
Opportunities:
Where are the good opportunities facing you?
What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
Changes in technology and markets on both a broad and narrow scale.
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Changes in government policy related to your field.
Changes in social patterns, population profiles, lifestyle changes.
Local events.
A useful approach for looking at opportunities is to look at your strengths and
ask yourself whether these open up any opportunities.
Alternatively, look at your weaknesses and ask yourself whether you could
create opportunities by eliminating them.
Threats:
What obstacles do you face?
What is your competition doing that you should be worried about?
Are the required specifications for your job, products or services
changing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?
Could any of your weaknesses seriously threaten your business?
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Carrying out this analysis will often be illuminating – both in terms of pointing
out what needs to be done, and in putting problems into perspective.
1.6 THE STRUCTURE OF THE RESEARCH WORK
This research work is to be organized in five chapters as follows:
1. Introduction
2. Review of Related Literature
3. Research Methods and Producers
4. Data presentation and Analysis and
5. Findings, Summary and Conclusion
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CHAPTER TWO
REVIEW OF RELATED LITERATURE
1.0 UNDERSTANDING SWOT ANALYSIS
SWOT analysis is a general technique which can be applied across diverse
functions and activities, but it is particularly appropriate to the early stages of
planning.. Performing a SWOT analysis involves the generation and recording
of the strengths, weaknesses, opportunities, and threats in relation to a
particular task or objective. It is customary for the analysis to take account of
internal resources and capabilities (strengths and weakness) and factors
external to the organisation (opportunities and threats).
Benefits
SWOT analysis can provide:
* a framework for identifying and analysing strengths, weaknesses,
opportunities and threats
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* an impetus to analyse a situation and develop suitable strategies and
tactics
* a basis for assessing core capabilities and competences
* the evidence for, and cultural key to, change
* a stimulus to participation in a group experience.
Action checklist
1. Establish the objectives
The first key step in any project: is to be clear on what you are doing and why.
The purpose of conducting a SWOT may be wide or narrow, general or specific.
2. Select appropriate contributors
Important if the final outcome is to result from consultation and discussion,
not just personal views, however expert.
3. Allocate research and information gathering tasks
Background preparation is a vital stage for the subsequent analysis to be
effective, and should be divided among the SWOT participants. This
preparation can be carried out in two stages: exploratory, followed by data
collection, and detailed, followed by a focused analysis. Gathering information
on Strengths and Weaknesses should focus on the internal factors of skills,
resources and assets, or lack of them. Gathering information on Opportunities
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and Threats should focus on the external factors over which you have little or
no control, such as social or economic factors.
4. Create a workshop environment
If compiling and recording the SWOT lists takes place in meetings, then do
exploit the benefits of workshop sessions. Encourage an atmosphere
conducive to the free flow of information and to participants saying what they
feel to be appropriate, free from blame. The leader / facilitator has a key role
and should allow time for free flow of thought, but not too much. Half an hour
is often enough to spend, for example, on Strengths, before moving on. It is
important to be specific, evaluative and analytical at the stage of compiling and
recording the SWOT lists - mere description is not enough.
5. List Strengths
Strengths can relate to the group, to the environment, to perceptions, and to
people. "People" elements include the skills, capabilities and knowledge of
participants. Other people strengths include:
* friendly, cooperative and supportive participants
* appropriate levels of involvement through delegation and trust.
6. List Weaknesses
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This session should not constitute an opportunity to focus on the negative but
be an honest appraisal of the way things are. Key questions include:
* what obstacles may prevent progress?
* which elements need strengthening?
* are there any real weak links in the chain?
It is not unusual for "People" problems - poor communication, inadequate
leadership, lack of motivation, too little delegation and no trust - to feature
among the major weaknesses.
7. List Opportunities
This step is designed to assess the socio-economic, environmental and
demographic factors, among others, to evaluate the benefits they may bring to
the TIPD visit. Examples include:
* the availability of new technology
Bear in mind just how long opportunities might last and how the group may
take best advantage of them.
8. List Threats
The opposite of Opportunities - which may, with a shift of emphasis or
perception, have an adverse impact.
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Weighing threats against opportunities is not a reason to indulge in pessimism;
it is rather a question of considering how possible negative experience may be
limited or eliminated. The same factors may emerge as both a threat and an
opportunity, for example, Information Technology. Most external factors are in
fact challenges, and whether the groups perceives them as opportunities or
threats is often a valuable indicator of morale.
9. Evaluate listed ideas against Objectives
With the lists compiled, sort and group facts and ideas in relation to the
objectives. It may be necessary for the SWOT participants to select their five
most important items from the list in order to gain a wider view. Clarity of
objectives is key to this process, as evaluation and elimination will be
necessary to cull the wheat from the chaff. Although some aspects may require
further information or research, a clear picture should, at this stage, start to
emerge in response to the objectives.
10. Carry your findings forward
Make sure that the SWOT analysis is used in subsequent planning. Revisit your
findings at suitable time intervals e.g. on return from you visit to check that
they are still valid.
Dos and don'ts for SWOT analysis
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Do
* Be analytical and specific.
* Record all thoughts and ideas in stages 5-8.
* Be selective in the final evaluation.
* Choose the right people for the exercise.
* Choose a suitable SWOT leader or facilitator.
Don't
* Try to disguise weaknesses.
* Merely list errors and mistakes.
* Lose sight of external influences and trends.
* Allow the SWOT to become a blame-laying exercise.
* Ignore the outcomes at later stages of the planning process.
2.1 SWOT ANALYSIS TEMPLET
Subject of SWOT analysis:
strengths Advantages of
proposition? Capabilities? Competitive
advantages? USP's (unique selling
weaknesses
Disadvantages of proposition?
Gaps in capabilities? Lack of competitive strength? Reputation, presence and
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points)? Resources, Assets,
People? Experience, knowledge,
data? Financial reserves, likely
returns? Marketing - reach,
distribution, awareness? Innovative aspects? Location and
geographical? Price, value, quality? Accreditations,
qualifications, certifications?
Processes, systems, IT, communications?
Cultural, attitudinal, behavioural?
Management cover, succession?
reach? Financials? Own known vulnerabilities? Timescales, deadlines and
pressures? Cashflow, start-up cash-
drain? Continuity, supply chain
robustness? Effects on core activities,
distraction? Reliability of data, plan
predictability? Morale, commitment,
leadership? Accreditations, etc? Processes and systems, etc?
Management cover, succession?
opportunities
Market developments? Competitors'
vulnerabilities? Industry or lifestyle
trends? Technology
development and innovation?
Global influences? New markets, vertical,
horizontal? Niche target markets? Geographical, export,
import? New USP's? Tactics - surprise, major
contracts, etc? Business and product
development? Information and
research?
threats
Political effects? Legislative effects? Environmental effects? IT developments? Competitor intentions -
various? Market demand? New technologies, services,
ideas? Vital contracts and partners? Sustaining internal
capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial
backing? Economy - home, abroad?
Seasonality, weather effects?
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Partnerships, agencies, distribution?
Volumes, production, economies?
Seasonal, weather, fashion influences?
2.2 SWOT ANALYSIS EXAMPLE
This SWOT analysis example is based on an imaginary situation. The
scenario is based on a business-to-business manufacturing company, who
historically rely on distributors to take their products to the end user
market. The opportunity, and therefore the subject for the SWOT analysis,
is for the manufacturer to create a new company of its own to distribute
its products direct to certain end-user sectors, which are not being
covered or developed by its normal distributors.
Subject of SWOT analysis example: the creation of own distributor company to access new end-user sectors not currently being developed.
strengths End-user sales control and
direction. Right products, quality and
reliability. Superior product
performance vs competitors. Better product life and
durability. Spare manufacturing
capacity. Some staff have
weaknesses
Customer lists not tested. Some gaps in range for
certain sectors. We would be a small player. No direct marketing
experience. We cannot supply end-users
abroad. Need more sales people. Limited budget.
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experience of end-user sector.
Have customer lists. Direct delivery capability. Product innovations
ongoing. Can serve from existing
sites. Products have required
accreditations. Processes and IT should
cope.
Management is committed and confident.
No pilot or trial done yet. Don't have a detailed plan
yet. Delivery-staff need training. Customer service staff need
training. Processes and systems, etc
Management cover insufficient.
opportunities
Could develop new products.
Local competitors have poor products.
Profit margins will be good. End-users respond to new
ideas. Could extend to overseas. New specialist
applications. Can surprise competitors. Support core business
economies.
Could seek better supplier deals.
threats
Legislation could impact. Environmental effects would
favour larger competitors. Existing core business
distribution risk. Market demand very
seasonal. Retention of key staff critical. Could distract from core
business. Possible negative publicity.
Vulnerable to reactive attack by major competitors.
2.3 EVIDENCE ON THE USE OF SWOT
SWOT analysis may limit the strategies considered in the evaluation. J. Scott
Armstrong notes that "people who use SWOT might conclude that they have
done an adequate job of planning and ignore such sensible things as defining
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the firm's objectives or calculating ROI for alternate strategies." Findings from
Menon et al. (1999) and Hill and Westbrook (1997) have shown that SWOT
may harm performance. As an alternative to SWOT, Armstrong describes a 5-
step approach alternative that leads to better corporate performance.
2.4 USE OF SWOT ANALYSIS
The usefulness of SWOT analysis is not limited to profit-seeking organizations.
SWOT analysis may be used in any decision-making situation when a desired
end-state (objective) has been defined. Examples include: non-profit
organizations, governmental units, and individuals. SWOT analysis may also be
used in pre-crisis planning and preventive crisis management. SWOT analysis
may also be used in creating a recommendation during a viability study.
2.5 CORPORATE PLANNING
As part of the development of strategies and plans to enable the organization
to achieve its objectives, then that organization will use a systematic/rigorous
process known as corporate planning. SWOT alongside PEST/PESTLE can be
used as a basis for the analysis of business and environmental factors.
Set objectives – defining what the organization is going to do
Environmental scanning
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o Internal appraisals of the organization's SWOT, this needs to
include an assessment of the present situation as well as a
portfolio of products/services and an analysis of the
product/service life cycle
Analysis of existing strategies, this should determine relevance
from the results of an internal/external appraisal. This may
include gap analysis which will look at environmental factors
Strategic Issues defined – key factors in the development of a
corporate plan which needs to be addressed by the organization
Develop new/revised strategies – revised analysis of strategic
issues may mean the objectives need to change
Establish critical success factors – the achievement of objectives
and strategy implementation
Preparation of operational, resource, projects plans for strategy
implementation
Monitoring results – mapping against plans, taking corrective
action which may mean amending objectives/strategies.
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2.6 MARKETING
In many competitor analyses, marketers build detailed profiles of each
competitor in the market, focusing especially on their relative competitive
strengths and weaknesses using SWOT analysis. Marketing managers will
examine each competitor's cost structure, sources of profits, resources and
competencies, competitive positioning and product differentiation, degree of
vertical integration, historical responses to industry developments, and other
factors.
Marketing management often finds it necessary to invest in research to collect
the data required to perform accurate marketing analysis. Accordingly,
management often conducts market research (alternately marketing research)
to obtain this information. Marketers employ a variety of techniques to
conduct market research, but some of the more common include:
Qualitative marketing research, such as focus groups
Quantitative marketing research, such as statistical surveys
Experimental techniques such as test markets
Observational techniques such as ethnographic (on-site)
observation
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Marketing managers may also design and oversee various
environmental scanning and competitive intelligence processes to
help identify trends and inform the company's marketing analysis.
Using SWOT to analyse the market position of a small management consultancy with
specialism in HRM.
Strengths Weaknesses Opportunities Threats
Reputation in marketplace
Shortage of consultants at operating level rather than partner level
Well established position with a well defined market niche.
Large consultancies operating at a minor level
Expertise at partner level in HRM consultancy
Unable to deal with multi-disciplinary assignments because of size or lack of ability
Identified market for consultancy in areas other than HRM
Other small consultancies looking to invade the marketplace
Track record – successful assignments
2.7 BUSINESS SWOT ANALYSIS
What makes SWOT particularly powerful is that, with a little thought, it can
help you uncover opportunities that you are well placed to exploit. And by
understanding the weaknesses of your business, you can manage and
eliminate threats that would otherwise catch you unawares.
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More than this, by looking at yourself and your competitors using the SWOT
framework, you can start to craft a strategy that helps you distinguish yourself
from your competitors, so that you can compete successfully in your market.
2.8 PROBLEMS WITH SWOT ANALYSIS
The greatest strength of SWOT is also its greatest weakness: flexibility. Because
of the flexibility the SWOT analysis can be used in a variety of situations, such
as developing a career plan, as we've discussed in a previous article.
But this flexibility means that there can be a number of irregularities in the
data. To overcome this, you can add the following to your SWOT analysis:
Personal Experience
How do you personally fit into the SWOT analysis? Your attitudes, experiences,
skills, beliefs all have an impact on the SWOT. Also make note of any biases
you might have.
The Proper Order
Sometimes the marketing manager will accidentally reverse opportunities and
strengths and threats and weaknesses.
The difference between internal strengths and weaknesses and external
strengths and weaknesses can be difficult to spot.
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For example, in the case of global warming, one could mistake the
environmental movement as a threat rather than as an opportunity.
Weighting
It can be helpful to use percentages while weighing the factors of the SWOT
analysis. For example, Threat A = 15%, Threat B = 80%, Threat C = 5%. Make
sure it adds up to 100%.
Emphasize Detail
Details, explanations and justifications are often omitted from the SWOT
analysis. Instead, SWOT analysis reports often just contain lists of single words.
For example, under opportunities one might find the single word "technology."
This one word doesn't tell the reader very much. A description like the
following would be much more informative:
'Technology makes it possible for marketers to communicate via mobile phone
right up until the point of purchase. This gives the opportunity of a competitive
advantage for our company.'
Writing out detailed descriptions will assist you when deciding upon how best
to weight each of your elements.
Rank and Prioritize
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Once you write out the details and you've weighed the elements and assigned
the appropriate percentages, you can then give your SWOT analysis some
strategic meaning. In other words, you can begin to select those factors that
will be the most important as you create your marketing strategy.
This will be a mix of strengths, weaknesses, opportunities and threats. You
should rank them highest to lowest. Then you should prioritize those with the
highest rank.
For example: if Opportunity C = 50%, Opportunity A = 35%, and Opportunity B
= 15% - your marketing plan should pursue Opportunity C first, and
Opportunity B last.
It is important to focus primarily on opportunities because your business
should be market oriented. Then you'll match strengths to opportunities and
look for a fit. If there are any gaps between current strengths and future
opportunities you should address those.
Also, try to rephrase threats as opportunities (as with the above global
warming and climate change example) and address weaknesses so that they
become strengths.
Perform a "gap analysis" to determine where you are now and where you want
to be. Come up with strategies to bridge the gap between them.
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CHAPTER THREE
RESEARCH METHODS AND PROCEDURES
3.1 RESEARCH DESIGNThe research method selected for the study is a
combination of a survey and an industrial study. The
survey research method is described hereunder that:
(i) It is a design in which primary data is gathered from
members of the sample that represents a specific
population;
(ii) It is a design in which a structure and systematic research
instrument like a questionnaire or an interview schedule is
utilized together with the primary data;
(ii) It is a method in which the researcher manipulates no
explanatory variables because they have already occurred
and so they cannot be manipulated;
(iii) Data are got directly from the subjects;
The subjects give the data the natural settings of their
workplaces;
38
(iv) The answers of the respondents are assumed to be largely
unaffected of the content in which they are brought;
(v) The impacts of the confounding factors are “controlled”
statistically; and
(vi) The aim of the research may span from the exploration
phenomena to hypotheses testing (stone 1995).
The survey research method has some merit, which are to
be articulated hereunder: In the survey research method,
the sample of the respondents are selected in such a way
as to make it low due to the utilization of big sample
sizes, which results in generally low sample errors.
The survey research method also has the merit that data
collection takes place in the “natural” settings of the
workplace rather than an activated laboratory. Data are
got directly from the respondents. The advantage that the
survey yields data that suggests new hypothesis is very
illuminating. There is also the merit that a set of
systematic data collection instruments such as
questionnaire interview schedules and observation
39
gadgets can either be used alone or in conjunction with
other instruments (stone, 1995).
3.2 SAMPLING
Spiegel (1992) observes that sampling theory is a study of
the relationship existing between a population or universe
and the samples drawn from it. The population in this
study is from the senior junior staff of the firms. In order to
make conclusions of sample theory and statistical
references to be valid, a sample must be selected as to
be representative of the population (Spiegel,1992). One
way in which a representative sample may be got, is by
the process of stratified random sampling. In this research
work, the technique of simple random sampling is used to
select the sample of 100 respondents from each group of
the personnel, making a total sample size of 200.
The list of all senior and junior staff of the firm is from the
personnel department of the company. The numbers were
written on a piece of paper, put in a basket and the papers
were folded to cover the numbers and one of the pieces of
40
paper was selected at a time without replacing it and any
name corresponding to the number becomes a number of
the sample. This method of sampling without replacement
was done until the sample of 100 respondents per group
of personnel was arrived at.
3.3 Population
The population, in this study is the totality of the senior
and junior staff of GONEL SYSTEMS LIMITED. PTI ROAD
EFFURUN.
The sample size is 200 and this number of respondents
was chosen from the population. The rationale for
studying a sample rather than the population includes
that:
1. Most empirical research work in the social science
involves studying a sample in place of the population.
2. Statistical Laws reveal that statistics composed
from the sample data are usually reasonably accurate.
3. Luckily, it is usually possible to estimate the level of
confidence that can be placed on the results.
41
We should note that above is only possible if the
probability sample size is large enough.
3.4 DATA COLLECTION
Questionnaire
As earlier stated, the primary data collection instrument in
this study is the questionnaire. In the questionnaire
method of primary data collection, heavy dependence is
placed on verbal reports from the subjects to get
information on the earnings per share and standard set.
The questionnaire has a lot of merits. It needs less skill to
administer. Questionnaire can be administered to a big
number of individuals at the same time. Also with a
specific research budget, it is usually possible to cover a
broader area. The impersonal nature of a questionnaire,
its structure and standardized wording, its order of
question, its standardized instructions for recording
answers might make one to conclude that it offers some
uniformity from one measurement occasion to another
(Selltiz et al, 1976).
42
Another merit of questionnaire is that subjects may have a
bigger confidence in their anonymity, and thus feel freer
to express views they feel might be disapproved.
Another attribute of the questionnaire that is sometimes,
though not always desirable is that it might place less
pressure on the subjects for immediate response (Selltiz et
al, 1976).
The questionnaire also has some demerits. It has noted
that for purpose of giving dependable responses to a
questionnaire, respondents must be considerably
educated. Thus one of the demerits of the usual
questionnaire is that it is appropriate only for with a
considerable amount of education. There is also demerit
that subject may be reluctant and unable.
To report on the particular subject matter. Also, if a
subject misinterprets a question or give his or her answer
in a batting manner, there is often a little that can be done
to ameliorate the situation. In a questionnaire, the
information the researcher gets is limited to the fixed
43
alternative answer format, when a specific answer is not
available, it can lead to error (Selltiz, 1976).
There is also limitation of memory in reporting on past
facts. The researcher is not a policeman that can compel
answers. That is, the information may not be readily
accessible to subject and thus the subject may be
reluctant to put forth enough alternative information that
he or she is only barely conscious of (Selltiz et al, 1996).
In this research project, a structured and undisguised
questionnaire is utilized which is made up of two parts
namely, the personal data section and the section on the
data on the actual subject matter of the work. The
questionnaire was undisguised in the sense that the
purpose of the data collection which was to collect primary
data for writing up the researcher’s HND project was made
know to the 200 respondents. The questionnaire was
structured in the sense the questions are logically
sequenced and are to be asked to the respondents in the
same manner and no follow up questions are to be
44
allowed. Some of the questions are of the fixed alternative
answer format type.
Ten (10) of the questions have yes or no answers,
Ten (10) of the questions have alternative answer for the
respondents to tick.
The structured questionnaire has the merit that it yields
data that is easier to analysis than data produced by an
unstructured questionnaire. Also the structured nature
diminishes both researcher’s and research instrument
biases. It however has the demerit that the rigidity of the
research instrument diminishes the amount of information
that could be got.
Interview
The method of communication of the research instrument
is by means of the personal interview. The method has the
merit that it produces a better sample of the population
than either mail or the telephone methods. It also has the
merit that it gives a very high completion and response
rates. It has the merit that the interview has a bigger
45
sensitively misunderstandings by the respondents and
gives a chance for clarification of misunderstood
questions. It has the merit that it is a very feasible method
(Selltiz et al, 1976). The personal interview method has
the demerit that it is more costly than the mail or the
telephone methods of communication of a questionnaire.
Observations
In addition to questionnaire and face-to face interviews,
observation was also carried out. This was to enable the
researcher to witness by herself the officers of this firm
and to interact with these people.
3.5 FIELD WORK
The researcher and three other field data collectors did
the fieldwork. The field data collectors were other
classmates also offering the Part-time HND program, who
have also offered research methodology. They had no
problem gaining entrance into the office under
consideration since one of them has a friend working
there. They were to be trained by the researcher on how
46
to greet the respondents and how to tick the questionnaire
correctly and honestly.
3.6 DESCRIPTION OF DATA PRESENTATION AND
ANALYSIS TOOLS
The data presentation tools are simple bar charts,
histograms, and pictorial tables. The most important parts
of a table include;
(a) Table numbers
(b) Title of the table
(c) Caption
(d) Stub or the designation of the rows and columns
(e) The body of the table.
(f) The head note or prefatory note or explanatory just
before the title.
(g) Source note, which refers to the literally or scientific
source of the table (Mills and Walter 1995)
47
Anyiwe (1994) has observed that a table has the following
merits over a prose information that;
(f) A table ensure an easy location of the required
figure;
(g) Comparisons are easily made utilizing a table than a
prose information;
(h) Patterns or trends within the figures which cannot be
visualized in the prose information can be revealed and
better depicted by a table; and
A table is more concise and takes up a less space than a
prose formation:
The data is to be analysed by means of percentage, cross
tabulation and the chi-square test of population
proportions for testing the two hypothesis. Percentages
express the ratio of two sets of data to a common base of
100. The researcher made us of the computer program
called SPSS (statistical package for social science) to carry
out the computation of the hypothesis testing.
48
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 INTRODUCTION
In the previous chapter, the research methods and
procedures have been handled. In this chapter the data
presentation and analysis are to be done. The data is to be 49
presented by means of tables, two simple bar charts, one
histogram and one pie chart to make it amenable for
further analysis. By analysis is meant the act of noting
relationship and aggregating the set of variables with
similar attributes and also breaking the unit of their
components (Mills and Walters 1995).
In this research work, the research accepts the contention
of Podsakoff and Dalton (1995) that the factual
information from the data can be used as a basis for
reasoning, calculation and discussion.
Apart from the heading above, the other headings in this
chapter include:
Data Presentation,
Percentage analysis
Cross-tabulated analysis
Hypothesis testing
50
4.2 DATA PRESENTATION
TABLE 4.1
THE SUMMARY OF THE PERSONAL DATA
OF THE RESPONDENTS
51
1
2
3
4
SEX
Male
Female
Total
Marital Status
Married
Single
Total
AGE
21-30 years
31-40 years
41-50 years
51-60 years
Total
HIGHER
EDUCATIONAL
QUALIFICATION
DIPLOMA
OND
HND
FREQUENCY
150
50
200
130
70
200
90
90
10
10
200
10
30
80
Angles
subtended
in degree
18
54
144
36
52
FIRST DEGREE
SECOND DEGREE
NIM
TOTAL
20
40
20
200
72
36
360
The marital statuses of the 200 respondents it is found that
130 of them are married while 70 of them are single. For
the ages of the 200 respondents they are 21-30 years, 31-
40 years, 40-50 years, 51-60 years with frequency of 90,10
respectively. For the educational qualification of the 200
respondents they are diploma, OND, HND, First Degree,
Second Degree, NIM. and they have frequencies of 10, 30,
80, 20, 40 and 20 respectively.
Figure 4.1 below shows the simple bar chart of the data on
the sex of the respondents.
FIGURE 4.1: THE SIMPLE BAR CHART OF THE DATA ON THE SEX OF THE RESPONDENTS
GENDER OF THE RESPONDENTS
53
160
140
120
100
80
60
40
20
0
-
-
-
-
-
-
-
-
-
MAIL FEMALE
Freq
uenc
y
TABLE 2. GENDER OF THE RESPONDENTS
Frequency
percentage
Valid Percent
Cumulative Percent
MAIL 150 75.0 75.0 75.0
FEMALE
50 25.0 25.0 100.0
Total 200 100.0 100.0
54
Gender
Source: from data in table 1 (generated from SPSS) statistical package for social science.
From figure 4.1 above, it is shown that male respondents
have the modal frequency of 150 out of the 200
respondents while the female respondents have the
frequency of 50 of them.
Figure 4.2 below shows the simple bar chart of the data on
the marital statuses of the respondents.
FIGURE 4.2: THE SIMPLE BAR CHART OF THE DATA ON THE MARITAL STATUSES OF THE RESPONDENTS
55
140
120
100
80
60
40
20
0
-
-
-
-
-
-
-
-MARRIED SINGLE
Freq
uenc
y
TABLE 4.3. MARITAL STATUS OF THE RESPONDENTS
Status frequency
Percentage
Valid Percent
Cumulative Percent
MARRIED 130 65.0 65.0 65.0
SINGLE 70 35.0 35.0 100.0
Total 200 100.0 100.0
From figure 4.2 above, it is shown that the married
respondents have the modal frequency of 130 out of the
200 respondents while the single respondents have the
frequency of 70 of them.
FIGURE 4.3: THE HISTOGRAM OF THE DATA ON THE AGES OF THE RESPONDENTS.
AGES OF THE RESPONDENTS
56
Marital status
020
4060
8010
0
1.0 2.0 3.0 4.0
Freq
uenc
y
Age group
TABLE 4. AGES OF THE RESPONDENTS
SOURCE: From the data in Table 1.
57
Categories
(years)
Frequency Percentage Valid
Percentage
Cumulative
Percent
21 TO 30 90 45.0 45.0 45.0
31 TO 40 90 45.0 45.0 90.0
41 TO 50 10 5.0 5.0 95.0
From figure 4.3 above, it is shown that the age classes
limit are 20.5-30.5 years, 30.5-40.5 years, 40.5-50.5 years
and 50.5-60.5 years with frequencies of 90, 90, 10, and 10
out of 200 respectively. This shows that this is bi-modal
distribution as the age classes of 20.5-30.5 years and 30.
5-40.5 years have a frequency of 10.
Figure 4.4 below shows the pie chart of the data on the
highest educational qualifications of the 200 respondents.
FIG.4.4 THE PIE CHART OF THE DATA ON THE HIGHEST EDUCATIONAL QUALIFICATIONS OF THE 200 RESPONDENTS
58
Educational level
Frequency Percentage Valid Percentage
Cumulative Percentage
DIPLOMA 10 5.0 5.0 5.0
OND 30 15.0 15.0 20.0
HND 80 40.0 40.0 60.0
FIRST DEGREE
20 10.0 10.0 70.0
SECOND DEGREE
40 20.0 20.0 90.0
NIM 20 10.0 10.0 100.0
Total 200 100.0 100.0
15%5%
10%
80%
10%
20%
FIRST DEGREE
OND DIPLOMA
FIRST DEGREE
OND
SECOND DEGREE
HND
TABLE 4. 5 EDUCATIONAL QUALIFICATION OF THE RESPONDENTS
SOURCE: from the data in table 1.
From figure 4.4 above, the Educational Qualifications are
Diploma, O.N.D, First Degree, Second Degree and NIM and
the subtended angles in degrees are equal to 180, 540,
1440, 360, 720 and 360 and respectively at the center of the
circle.
4.3 CROSS-TABULATED ANALYSIS
Table bellow show the analysis of the statuses of the 200
respondents
TABLE 6. CROSS- TABULATION 1
59
DIPLOMA
OND
HND
FIRST
DEGREE
SECOND
DEGREE
NIM
Total
The usefulness of SWOT analysis is not limited to profit
making organisations
YES NO DON’T
KNOW
NO
ANSWERTotal
6
19
60
-
31
21
100
2
31
10
43
2
9
11
2
7
9
39
12
19
91
26
31
21
200
939
The above table shows that the total of 100 respondents
(out of 200 said YES. This proved that A company does not
die but continue to exist until its name is dissolved
through a legal process.
TABLE 7. Cross-tabulation 2
The above table indicates that A company may own
property distinct from the property of its members, 104
respondents out of 200 said yes. While 40 did not agree
with the fact.
4.4 HYPOTHESIS TESTING
In attempting to arrive at decisions about the population,
on the basis of sample information, it is necessary to
make assumptions or guesses about the population
parameter involved. Such an assumption is called
statistical hypothesis, which may or may not be true. The
60
DIPLOMA 10 10
OND 19 19
HND 14 30 47 91
FIRST
DEGREE 10 9 19
SECOND
DEGREE 40 40
NIM 21 21
Total 104 40 47 9 200
The greatest strength of SWOT is the greatest weakness: flexibility
YES NODON’T
KNOW
NO
ANSWERTotal
procedure, which enables the researcher to design on the
basis, is sample regards whether a hypothesis is true or
not is called test of hypothesis or test of significance.
The null hypothesis asserts that there is no significant
difference between the statistics and the population
parameters and what ever is observed difference is there,
is merely due to fluctuations in sampling from the same
population. Null hypothesis is thereby denoted by the
symbol H0. Any hypothesis, which contradicts the H0, is
called an alternate hypothesis and is denoted by the
symbol H1. The researcher used chi-square analysis.
CHI-SQUARE TEST
The c is one of the simplest and most widely used non-
parametric test in statistical work. It makes no
assumptions about the population being sampled. The
quantity c describes the magnitude of discrepancy
between theory and observation i.e. with the help of c test
we can know whether a given discrepancy between theory
and observation can be attributed to chance or whether it
61
results from the inadequacy of the theory to fit the
observed facts. If c is zero, it means that the observed and
expected frequencies completely coincide. The greater the
value of c the greater will be the discrepancy between
observed and expected frequencies.
The formula for computing chi-square is –
c =(O-E)2/E
Where,O=Observed frequency
E=Expected or theoretical frequency
4.5 SOFTWARE USED FOR DATA ANALYSIS:
For the data analysis and the interpretation, the
researcher has adopted advanced version of SPSS
(statistical package for social science). This application
software has facilitated the researcher to construct the
frequency table, various types of charts and to find out the
valid percentage responses from the sample. By this
automated data analysis it has minimized the researcher’s
62
time constraints and reduced human error and give also
accurate outlay of information.
Chi-Square Test (1)
The usefulness of SWOT analysis is not limited to profit making organisations
Observed
F
Expected
F
Residual Decision
YES
NO
DON’T
KNOW
NO
ANSWER
Total
100
43
39
18
200
50.0
50.0
50.0
50.0
50.0
-7.0
-11.0
-32.0
Accept
Reject
Reject
Reject
Chi-Square Test (2)
The greatest strength of SWOT is the greatest weakness: flexibility
63
Residuals
The observed value of the dependent variable minus the
value predicated by the regression equation, for each
case. Large absolute values for the residuals indicate that
the observed values are very different from the predicted
values.
SOURCE: From the questionnaires administered.
The formulated hypothesis that is subject to statistical test
is at 5% level of significance in testing hypothesis, the
calculated value of the test statistics is usually compared
with tables of value. The critical values of the test
64
Observed
F
Expected
F
Residual Decision
YES
NO
DON’T
KNOW
NO
ANSWER
Total
104
40
47
9
200
50.0
50.0
50.0
50.0
54.0
-10.0
-3.0
-41.0
Accept
Reject
Reject
Reject
statistics serve as criterion value. It afforded the basis for
rejecting the null hypothesis is a function of the value of
the tested statistic.
Reject the null hypothesis if the calculated value of the
test statistic is greater than the critical value.
Accept the null hypothesis if the calculated value of the
test statistic is less than the critical value.
TEST STATISTICS
note: df = degree of freedom
65
The usefulness of SWOT
analysis is not limited
to profit making
organisations
The greatest strength of SWOT is the
greatest weakness: flexibility
Chi-Square
df
73.880
3
94.120
3
4.6 SUMMARY OF RESULT
Level of significance……….0.05
Critical value………………………43.0
Calculated value……………………73.880
From the above analysis, it could be seen that in the first
test, the usefulness of SWOT analysis is not limited to
profit making organisations, the calculated value is
greater than the critical value so we reject the hypothesis.
In the second test which state that the greatest strength
of SWOT is the greatest weakness: flexibility, the level of
significance is 0.05, the critical value is 44 while the
calculated value from the test statistics table is 94.120.
Looking the data above, it shows very clear that the
calculated value is greater than the critical value so we
reject the hypothesis.
66
CHAPTER FIVE
FINDINGS, SUMMARY AND CONCLUSION
1.1 FINDINGS
The researcher discovered during the course of the research that:
-SWOT analysis is a tool for auditing an organization and its
environment.
-It is the first stage of planning and helps marketers to focus on key
issues.
67
-SWOT stands for strengths, weaknesses, opportunities, and
threats.
-Strengths and weaknesses are internal factors. Opportunities and
threats are external factors.
-You can use a SWOT analysis to identify and analyze the Strengths
and Weaknesses of your organization, as well as the Opportunities and
Threats revealed by the information you have gathered on the external
environment.
- To develop a plan that takes into consideration many different internal
and external factors, and maximizes the potential of the strengths and
opportunities while minimizing the impact of the weaknesses and
threats.
5.2 SUMMARY
A scan of the internal and external environment is an important part of the
strategic planning process. Environmental factors internal to the firm usually
can be classified as strengths (S) or weaknesses (W), and those external to the
firm can be classified as opportunities (O) or threats (T). Such an analysis of the
strategic environment is referred to as a SWOT analysis.
68
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 strategy formulation and selection. The following
diagram shows how a SWOT analysis fits into an environmental scan:
SWOT Analysis Framework
Environmental Scan
/ \
Internal Analysis External Analysis
/ \ / \
Strengths Weaknesses Opportunities Threats
SWOT Matrix
5.3 CONCLUSION
SWOT Analysis is a strategic planning method used to evaluate the
Strengths, Weaknesses, Opportunities, and Threats involved in a project
or in a business venture. It involves specifying the objective of the
business venture or project and identifying the internal and external
factors that are favorable and unfavorable to achieving that objective.
The technique is credited to Albert Humphrey, who led a convention at
69
Stanford University in the 1960s and 1970s using data from Fortune 500
companies.
A SWOT analysis must first start with defining a desired end state or
objective. A SWOT analysis may be incorporated into the strategic
planning model. An example of a strategic planning technique that
incorporates an objective-driven SWOT analysis is Strategic Creative
Analysis (SCAN). Strategic Planning, including SWOT and SCAN
analysis, has been the subject of much research.
Strengths: attributes of the person or company that are
helpful to achieving the objective.
Weaknesses: attributes of the person or company that are
harmful to achieving the objective.
Opportunities: external conditions that are helpful to
achieving the objective.
Threats: external conditions which could do damage to the
objective.
Identification of SWOTs is essential because subsequent steps in the
process of planning for achievement of the selected objective may be
derived from the SWOTs.
70
First, the decision makers have to determine whether the objective is
attainable, given the SWOTs. If the objective is NOT attainable a
different objective must be selected and the process repeated.
The SWOT analysis is often used in academia to highlight and identify
strengths, weaknesses, opportunities and threats. It is particularly helpful
in identifying areas for development
71