SWOT dari buku management

The big idea
Any company undertaking strategic planning will at some point assess its
strengths and weaknesses. When combined with an inventory of opportunities
and threats in (or even beyond) the company’s external
environment, the company is effectively making what is called a SWOT
analysis: establishing its current position in the light of its strengths,
weaknesses, opportunities and threats.
When to use it
The first step in carrying out a SWOT analysis is to identify the said
strengths, weaknesses, opportunities and threats. It is important to note
that strengths and weaknesses are intrinsic (potential) value creating
skills or assets, or the lack thereof, relative to competitive forces.
Opportunities and threats, however, are external factors: they are not created
by the company, but emerge as a result of the competitive dynamics
caused by (future) ‘gaps’ or ‘crunches’ in the market.
Strengths
What is the company really good at? Do we benefit from an experienced
sales force, or easy access to raw materials? Do people buy our products
(partly) because of our brand(s) or reputation? Strengths are not: a growing
market, new products, etc.
Weaknesses
Though weaknesses are often seen as the logical ‘inverse’ of the company’s
threats, the company’s lack of strength in a particular discipline ormarket is not necessarily a relative weakness, providing (potential) competitors
lack this particular strength as well.
Strengths and weaknesses can be measured in an internal or external
audit, for example, through benchmarking (see Benchmarking model).
Opportunities and threats occur as a result of external macroenvironmental
forces such as demographic, economic, technological, political,
legal, social and cultural dynamics, as well as external industry-specific
environmental forces such as customers, competitors, distribution channels
and suppliers.
Opportunities
Are any technological developments or demographic changes taking place,
or could demand for your products or services increase as a result of successful
partnerships? Can you perhaps use assets in other ways, introduce
your current products in new markets or turn R&D into cash by licensing
concepts, technologies or selling patents? There are many opportunities.
The level of detail and (perceived) degree of realism determine the extent
of opportunity analysis.
Threats
Your competitor’s opportunity may well be a threat to you. Also, changes
in regulations, substitute technologies and other forces in the competitive
field may pose serious threats to your company: lower sales, higher cost of
operations, higher cost of capital, inability to make break-even, shrinking
margins or profitability, rates of return dropping significantly below
market expectations, etc.
186 Key management models
Increasing fuel price
Probability
Potential impact
Low cost
entrance
Depression
Shift to
Internet
New
technlogy
Opportunities and threats
Both opportunities and threats can be classified according to their
potential impact and actual probability, as illustrated below.
Listing the SWOT is not as easy as it seems. However, the second step of
the SWOT analysis is even more difficult: what actions should your company
take based on its strengths, weaknesses, opportunities and threats?
Should you focus on using the company’s strengths to capitalize on opportunities,
or acquire strengths in order to be able to capture opportunities?
Or should you actively try to minimize weaknesses and avoid threats?
‘SO’ and ‘WT’ strategies are quite obvious. A company should do what
it is good at when the opportunity arises and steer clear of businesses that
it does not have the competencies for. Less obvious and much more daring
are ‘WO’ strategies. When a company decides to take on an opportunity
despite not possessing the requisite strengths, it must either:
develop the required strengths
buy or borrow the required strengths
outmanoeuvre the competition.
Companies that use ‘ST’ strategies essentially ‘buy or bust’ their way out
of trouble. This happens when big players fend off smaller ones by means
of expensive price wars, insurmountable marketing budgets, multiple
channel promotions, etc. Some companies use scenario planning to try
and anticipate and thus be prepared for this type of future threat.
SWOT analysis 187
WT Strategies
Minimize weaknesses
and avoid threats
ST Strategies
Use strengths to avoid
threats
WO Strategies
Take advantage of
opportunities by
overcoming weaknesses
or making them relevant
SO Strategies
Use strengths to take
advantage of
opportunities
Strengths (S) Weaknesses (W)
Opportunities
(O)
Threats
(T)


The final analysis
The value of a SWOT analysis lies mainly in the fact that it constitutes a
self-assessment for management. The problem, however, is that elements
(SWOT) appear deceptively simple. Actually deciding what the strengths
and weaknesses of your organization are, as well as assessing the impact
and probability of opportunities and threats, is far more complex than at
first sight. Furthermore, beyond classification of the SWOT elements, the
model offers no assistance with the tricky task of translating them into
strategic alternatives. The inherent risk of making incorrect assumptions
when assessing the SWOT elements often causes management to dither
when it comes to choosing between various strategic alternatives, frequently
resulting in unnecessary and/or undesirable delays.
188 Key management models