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SWOT Analysis and Tools Essay

SWOT is analysis of company. It is opened as Strengths, Weakness, Opportunities and Treats. With this model you can analyze what can or cannot do the company, and also what are the potential opportunities and threats. This is environmental analysis, which include external and internal issues. As the pioneer of this analysis, and one of the first strategy theorists Ken Andrew was the first who analyzed the strategy with considering capabilities and resources with the external environment. For analyzing and strategizing we should consider the following points: As Strength and Weakness we should answer the question: what can we do? What resources and capabilities do we want to develop? What do we want to do? And what should we be carrying about? (Organizational and context attributes). As external Opportunities and Threats we should answer the question: what might we do? What opportunities can we develop? Considering what do other expect us to do? How can we build shared expectations among our stockholders?

First you need to diversify and classify by ranking the environmental issues, for example for internal strengths write first most important, than 2nd than so on. Second you should put together the internal factors with external factors, example showed below.

Graph 1:

Here you can see how to match them, 1. The internal strength is analyzed with external opportunities, 2nd internal weakness relative to external opportunities and so on. With the help of this you consider all factors that have and/or could affect the company, so with this method you can formalize strategy for company.

Now we will see some methods or tools to gather strengths, weaknesses, opportunities and threats.

Industry Analysis Perspectives: this analysis includes structural analysis, competitive forces analysis and supply chains & value chains analysis.

Structural analysis focuses on external structural variables, which affects firms’ strategy and performance. This analysis contains structure, conduct and performance. The last aspects can be considered as internal factor: this analysis representing and analyzing the industry with 5 forces, in the middle of industry competitors, in one side are buyers, in the opposite site are suppliers and the other two are substitutes and new entrants. This analysis can be considered as external factors.

Competitive map based on resource and market commonality: This is a great tool which helps to identify current and potential competitors and find the position of the company in the competitive situation. This tool will help to analyze the external factors. It will show what is current competitive situation in the market (treats or internal strengths) and what opportunities it has.

Cross price elasticity: This is good way to identifying competitors through interdependency. This help to identify the interactions with order markets and also identifies the players in the same market. Cross price elasticity tool can help to analyze the external factors of company and also internal strengths. Structural homogeneity: In this analysis you look at different strictures and see which of them matches with competitors. This tool we can consider as external factors, but they include the internal factors also, cause the position of company in the market is coming from the internal environment.

Product differentiation: This is measuring the product with individual characteristics, considering all characteristics of a product, not the product as one object. There are two ways of differentiation, one is vertical differentiation, and the other is horizontal differentiation. This tool can help to SWOT analysis to measure the external factors, how good is product in the market.

Importance/Performance analysis: This is analysis of company’s internal factors. It is measuring the performance of the factor and importance, thus you can see the strengths or weakness of the internal organization.

The evaluation of overall satisfaction: This is tool to evaluate the satisfaction from characteristic of product with the help of Kano model questionnaire. Represented in two dimensions, one is satisfaction/dissatisfaction and the other is characteristic value. This is one of the ways to evaluate the internal factors of company.

Competitive map: This is a good tool to analyze market position of the product or company. It is competitive map based on market share and relative price. It is represented in two dimensions, one is relative price the other dimension is market share. This is a very good tool to analyze product relatively to competitors, it can support to SWOT analysis for external factors.

System mapping is representing cause-effects of the events. With the help of this you can make the strategy for company, it include both internal and external factors, so this tool can be joined to SWOT analysis to help to formalize strategy for company.

Strategic Business Unit: This is competitive analysis through homogeneity. You should take tree factors from which you make graph with tree dimensions. The tree factors are technology, benefits and group of customers. From this analysis you can conclude both internal and external factors, so this is another way, which we can put horizontally with SWOT analysis, it is we can say “substitute” but also can be support to SWOT analysis.

Price sensitivity and product differentiation: This is analyzing the product’s place in the market considering the quality and price. The representation of this analysis is two dimensions, one is relative expected price the other side is perceived quality. With the help of this you can see the place in the market with quality and price as a measure. This is good tool to analyze the internal strength and/or weakness and comparison with competitors. I am considering this as an internal measure, And afterwards you can see the threat from other company’s and opportunities in the market.

We have looked threw some tools and methods which can support to SWOT analysis. I have classified the, as internal and external or general analysis, because based on analysis only you can know the result is strength or weakness for your company. Below I am representing them once more together identified, the tools that are not included are general analysis, which contains both internal and external factors.

Structural analysis: structure, conduct
Competitive forces analysis
Competitive map based on resource and market communality
Cross price elasticity
Product differentiation
Competitive map

Structural analysis: performance
Competitive map based on resource and market communality
Structural homogeneity
Importance/Performance analysis
The evaluation of overall satisfaction

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