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ValueMathics SWAT ANALYSIS Slide 2 The SWAT analysis is a new generation balanced scorecard that uses elements of The Magic Pallet to analyse the potential of a firm or a sector in a given market segment. TCO 1.Value added reflected as VALUE CHAIN on vertical axe 2.Perceived benefits and total cost of ownership* reflected as CUSTOMER VALUES on horizontal axe. * TCO is the result of MMMMM plus CCCCC The tool Slide 3 SWAT stands for.. Sources Cost of means, like technical and commercial people, manpower, money, machines and raw materials Minds, Money, Manpower, Machines, Materials Winners Core competencies of the firm which create competitive advantages in the value system Technology, Production, Logistics, Marketing, Support Alliances Forward or backward alliances with technology providers, marketing companies, logistical service providers and others Trends General direction of changes in customer values, like product characteristics, process requirements, delivery and stocking, desired image and service requirements as well as CSR issues Product, Access, Speed, Image, Service Slide 4 The SWAT analysis Slide 5 TPLMS are the value activities of a firm -the source for competitive advantages its value chain. Being the drivers for value creation, we put them on the vertical axe of the SWAT analysis. Slide 6 On the horizontal axe, we list the PASIS - required product, process and vendors benefits of a given buyers segment. Slide 7 TCO Total Cost of Ownership is the column for the comparative and competitive advantages of the firm or sector. We know them as MMMMM Minds, Money, Man power, Machines, Materials and CCCCC Cost, Change, Chance, Chrono, Conflict Slide 8 The crossroads of rows and colums give us the relevant issues in supply and demand that are subject the SWAT analysis Slide 9 Slide 10 Is the MD-2 variety available in the country ? Are there certified test faciltities to guarantee the quality of the pineapple? Can ripeness be tested to get the product at the right ripeness on the shelf ? Is the growing and harvesting process adequate to preserve the unique characteristics of the pineapple? Does the region have the proper temperature range for this variety? How are post harvest conditions? Is transport and warehousing adequate for the chill sensitiveness of pineapples? Are transit times suitable for the riping period of the pineapple ? Does the company communicate the unique properties of this variety to its prospects or custiomers ? Is there appropriate information on the specifications in brochures or on a website ? Does the company provide product information for consumers on labels or leaflets. Are there suggestions as how to serve the pineapple or ideas for recipes ? TECHNOLOGY PRODUCTION LOGISTICS MARKETING SUPPORT MD-2 variety, oval shape, no spines exept at the leaf tip, clear yellowish colour inside,sweet taste, hard green leaves, equal patches DESIGN EXAMPLE 5 3 -5 -3 PRODUCT Slide 11 SWAT - methodology 1.Gather 3-5 persons; 3=minimum, 5 = maximum one/three persons from the firm; one/two from TPO, client or supplier; one independent expert/facilitator 2.Fill in the SWAT analysis individually without consultation with other persons 5 or 3 or 1 or -1 or -3 or -5 for scroes per column Use each number only once, leave blank if no correlation 3.Add up individual scores for total group results 4.Add up columns and rows for first assessment 5.Circle areas of high scores green = USP/CORE COMPETENCIES 6.Circle areas of low scores red= CHALLENGES/ALLIANCES 7.Define knock-out criteria and desirable areas per sector/market 8.Decide on go or no-go for exports 9.Define corrective actions in the red areas 10.Construct the business model around the green areas. Slide 12 This is an example of an individual SWAT sheet. You start filling the numbers column by column. The question at each crossroad is To what extent does the value chain of the firm meet the specific customer values of the buyer ? In each column, numbers can be used only once. If you cannot find a correlation between a certain value activity and a specific customer benefit, leave the space blank Slide 13 This is an example of a consolidated SWAT sheet. Individual results are added up. First analysis is whether the numbers close to zero are the result of consensus or opposite opinions in the group. If all members have interpreted the respective box in the same way, but still have different opinions, the scores are left untouched. Slide 14 Second analysis is a quick scan of the firm and its potential to enter in a certain market segment From the horizontal totals, we see a company that excels in production and logistics, but with a low level of technology, and serious shortcomings in marketing and support From the vertical scores, we see that the firm does not meet the buyers requirements in product attributes and support, but scores wel in compliance with norms and standards; it meets the buyers expectations in reputation. Delivery and availability are acceptable. Slide 15 However, the unique asset of the SWAT analysis is its detailed analysis of focus -green areas- and challenge red areas- of a firm. These are the basis for the selection of the right product/market combination, the unique selling proposition and corrective actions to be taken. SWAT - consolidated results Slide 16 The product brand(1) does not represent a value in the target market, product support (2) is bad. The firms response time is insufficient (3). It needs an alliance with a trade partner that will take care of the service needs of the market (4). Cost of logistics make the offer uncompetitive (5) 1 2 3 4 5 SWAT - challenge Slide 17 This companys unique selling proposition to its target market is its production technique, meeting all international standards and norms (1) at a globally competitive price (3) The firm is capable to deliver JIT or maintain stocks where necessary (2) A license contract with a technology provider will convert this firm into a globally competitive private label manufacturer 1 2 3 SWAT - focus Slide 18 SWAT in a nutshell 1.The SWAT analysis uses elements of The Magic Pallet from supply side -value chain- and demand side -customer values 2.Core analysis is a firms capability to make a competitive value proposition to a targeted market segment 3.Outcome of the analysis give tangible not subjective- strengths and weaknesses focus and challenge 4.This outcome is the basis for An appropriate product/market combination A unique selling proposition A market entry strategy 5.Multiple SWATs are the most reliable input for sector analyses and sector strategies To see how the SWAT results are converted into the business model, go to THE BUSINESSTHE BUSINESS