SWOT Analysis Model - Assignment Example

SWOT Analysis Model Student Name Course Tutor Institution Date 1. Question 1: The SWOT analysis became a basis from which a company’s strategy is built. However when used it in a wrong manner it can jeopardize the future of a company. Using some specific examples of your choice, evaluate the SWOT model. SWOT Analysis Model Introduction SWOT analysis is a business planning tool that emanates from analyzing business and marketing strategies aiding organizations or companies assess and reflect better on their strengths, weaknesses opportunities and threats (SWOT). SWOT involves specifying the key objectives of a project or business. After which, there is a follow through by identifying favorable and unfavorable internal, external factors influencing the achievement of the same. This analysis assists an organization better to understand their particular planning strategies and how best to implement them; to avoid deviating from the plan. SWOT analysis is an essential and effective tool that requires proper resources and ample time, however if done wrongly, can turn into a company’s worst nightmare. Wrong implementation of SWOT analysis can cause a company to fail, therefore looking at how use SWOT analysis the right way starts with the right SWOT framework. The SWOT framework is a two-by-two matrix whose success involves a group of members including key players and team members of the organization present (Bertelsen, 2012 p.6). This study evaluates the SWOT model, what constitutes the model, the pros and cons of choosing SWOT, and when to use SWOT model in successful strategic planning. Aim of SWOT Analysis A good SWOT aims at analysing the aspects that give an organization added advantage, sales prospects and possible prospects for increased profitability and development enhancement. Additionally SWOT ensures an organization's preparedness and the necessary contingency plans are in place (Humphrey, 2005 p.7). For example, a SWOT analysis done on RadioShack by one of their sales staff revealed the opportunities that keeps it in competition with other companies and has sustained in the electronic retail market to date. A thorough evaluation of the SWOT model remains a crucial factor in ensuring the most efficient analysis is applied and used correctly in strategic planning. For example, clarify the objectives and what organization or team the analysis intends to target. Afterward the team should brainstorm ideas that they want to include in their strategic planning and clarify those ideas before they incorporate them into strategies. The International Fund for Agricultural Development (IFAD) reasserts the usefulness of a good SWOT analysis that begins with a well-planned SWOT model (Humphrey, 2005 p.21). IFAD describes the benefits of a good SWOT in carrying out a qualitative assessment of projects, project stakeholder’s relationships, the organization of the strategy implementing partners and the initial project team. Critique Despite the benefits associated with SWOT model critiques have attested its methodology to working both ways; as a quick and a dirty tool as well. Its flexibility qualifies it a quick tool that is an advantage, but research findings have reported that SWOT can also harm an organization's performance immensely (Hill& West, 1997 p.26). For example, Menon et al. (1999, p.11) found out that a SWOT analysis plays around with the variables that keep on changing like how many customers visit Starbucks versus McDonalds daily. These variables only lead to actions that best suit the one organization they target and not a wider scope that covers a wider corporate strategy. The two authors went ahead to suggest the Porter five forces analysis and growth-share matrix over the SWOT model. Heinz Weihrich, (2000, p.10) supports the above criticism by reasserting that most people find it difficult to translate the SWOT analysis results into meaningful and workable actions; covering a wider corporate strategy compared to the two options named above. The SWOT Analysis Matrix Model The SWOT analysis exist in a two-two matrix model that targets the both the positive of the internal and external factors surrounding strategic planning. The positive analysis focuses on the strengths and opportunities while the negative or potential to result in negativity focuses on the threats and weaknesses. An example of the matrix model for an NGO (Start & Hovland, 2004 p.2) Strengths • The lead researcher’s strong ties with the community. • The organization's good reputation within the community’s policy • Plenty of disposable time • Have good links with the Ministry. Weaknesses • Vulnerability of staff shortage; leave or sick • Staff with shallow skill set. • Very Little reputation with the other government bodies. Opportunities • Working on a current controversial issue • Support from other NGO’s in the region • Current interest by government in NGO’s claims. Threats • Political sensitivity of the report; threatening sponsor funding • Evidence of information that would sabotage our work. Strengths are the positive attributes that within the control of the organization. They exist internally in an organization as intangible and tangible. Weaknesses are those detractive factors within the organization that pulls it back from reaching its full potential. For instance, in the NGO the run a high risk of staff shortage and the available staff do not have the necessary skill set to propel the organization forward. Opportunities are those external factors that present a reason for the organization’s existence and success. SWOT analyzes these factors in the context of what would propel the organization towards achieving their goals and identifies them by what period of availability. Threats normally exist as factors beyond the organization’s control that could drag or jeopardize the organization’s operations. Most organizations tend to prepare for threats but not a hundred percent. Contingency measures act as levers for such situations in case a threat occurs, and they are categorized according to occurrences and level of seriousness. Internal factors may fall under the strengths and weaknesses category, but external factors include a wide range of variables. For example, macroeconomic factors, technological change, marketplace changes, socio-cultural and legislative changes (Quincy, 2000 p.16). How to do a SWOT Analysis When a team follows the right and same process of SWOT they determine its success and avoid jeopardizing the operations of an organization; regardless whether they plan to re-strategize or expand future planning (Armstrong 1982, p.5). Step 1: Collection of information both strengths and weaknesses. Conducting personal interviews and brainstorming objectives Prepare and use questions that target the specific product or company objective to search for more insight. Step 2: Focuses on what opportunities the future might present (future strengths) and the possible threats (future weaknesses). Step3. Entails the strategic action plan that results from reviewing the SWOT matrix to address all the four categories. Factors that influence a successful SWOT Analysis Since one man cannot single-handedly carry out SWOT analysis, the group needs to have governing attributes. First, willingness and the ability to enact change trust to enable them share weakness and threats openly and the respect for time and thoroughness. Diversity is also extremely important as it ensures that all departments of an organization taking part in the planning get represented in the SWOT. Necessary steps to the SWOT process involve assembling a SWOT team, establishing that the whole group has all the necessary components for an efficient SWOT and setting up meetings in between SWOT to analyze progress. Later individual distribution of the SWOT template comes in as the group continues with meeting to combine results and collaborate each of the four areas for a complete analysis. Lastly, hold a discussion to strategize on the action plan addressing the all the four components of SWOT (Armstrong, 2006 p.4). A workable SWOT has to work with an objective in order to qualify for incorporation into strategic planning. After a SWOT decision-makers step in to determine the attainability of the set objective if it fails, then the team has to repeat the process again. If the objectives qualify then the team can start generating strategies that base on questions such as how to you use strength and how to put a stop or remove each weakness. Focusing on the opportunities the team brainstorms on how they can exploit them and how to defend the organization against the possible threats (Quincy 2000, p.10). SWOTS examined in a SWOT analysis The strengths and weakness assessed in a SWOT include the facts and assumptions about that particular organization, for example, the people, properties, processes, products, operation, finance, marketing, and resources (Humphrey, 2005 p.17). For example, a SWOT analysis of RadioShack electronic company examined its strengths based on the number of stores they had and the training they gave their staff. Additionally, they looked at the large stores, their location in the market and marketing using the easily noticeable logo. They capitalized their weakness on weak equity research, sales performance and the size of their inventory stores. Examining opportunities and threats focus on the external factors like the competitive market factors and environmental factors. Environmental factors that fuel SWOT analysis may also borrow a few aspects from the Porters five analysis. They include demographics, sociological, technology, cultural, economic and political changes. The competition factors include products, prices, market segments, product life cycle, capability, and ownership. Strengths and Weaknesses of SWOT Analysis SWOT analysis assists organizations to gauge the attainability of set objectives and thus enabling setting of achievable goals and necessary steps to achieve development. It also enables the achievement of visions and practical efficiency in outcomes in order to attain durable changes. Organizations also base on this analysis to gather meaningful information that aids them in reaching their full potential. For example SWOT analysis on the Coca-Cola Company revealed the gap that existed between its marketing and other competitors; hence enabling them correct the same and develop their distribution. SWOT also ensures that a company meets the gender and cultural diversity in terms of the planning team. On the other hand, SWOT has a couple of weaknesses that when the process gets misused, puts the organization at risk (Thomas &Kasshanna, 2007 p.20). SWOT allows room for quick fixes and designing of strategies that might lead to misinterpretation of the organization’s surrounding SWOTS (strengths, weaknesses, opportunities, and threats). Critiques have reported the development of SWOT to make up for past poorly set objectives and goals. The misuse of SWOT also limits maximum brainstorming of possible barriers and threats. The use of SWOT in businesses has put the organization's well-being before the community which sounds ethically wrong (Koch, 2000 p.8). A SWOT analysis done by two or three organization employees limits the reality of the forces that affect the wider corporate strategy. When to use SWOT Analysis Use of the SWOT model in organizations at the community level contributes to providing in-depth information about present barriers and threats that may occur in the future. This process continues while the organization engages and adapts to social change and identifies possible strengths that they could use to fight such barriers (Armstrong, 2006 p.20). Users should include SWOT analysis in their organizations only when: • Managing and adapting to change • Devising which direction would most benefit the company. • Revising plans that would increase navigation systems in an organization and the community • Identifying barriers and threats that would hinder the achievement of goals and objectives • Validating and developing the credibility of their interpretation to key stakeholders and company leaders • Brainstorming; as device for communication and recording necessary information • Revealing possible opportunities and threats to change • Exploring new strategies and solutions to operational or planning problems Implications of the SWOT model of Analysis Many texts have promoted SWOT analysis as a very meaningful technique, however; the same does not apply in the practical business world. Some authors have strongly emerged and termed the analysis as a waste of precious time. After thoroughly assessing its use in the UK, by twenty companies between 1993 and 1994, experts drew a conclusion. They stated that the model had so many flaws, and it had reached a point of pulling it from use (Hill& Westbrook, 1997 p. 22). Furthermore, SWOT mixes up the generation and evaluation of ideas that limits the range of absorbed strategies. Undertaking SWOT analysis in the context of the marketplace, organization, and its goals affects the organization's operations negatively (Jackson, 2010 p.11) Recommendations Looking at the analysis process, I would say that the team does not cover everything, but only assume that they have done enough planning. Instead, they go ahead and overlook other meaningful objectives and organizations alternative strategies. Therefore, the team needs to think about expanding their diversification. SWOT analysis should not just include the members of an organization; it ought to involve an external force for example community representatives and their customers. On the other hand, I tend to disagree with the choice to recall such a brilliant idea from the business world, but recommend that the necessary measures remain necessary when using the SWOT model. People using this analysis model need only know its strengths and limitations and use it ethically to benefit business and other organizations. Lastly, in an effort to manage the risk of jeopardizing an organization's performance, I recommend a SWOT-landscape analysis within the main analysis. Members from the same organization who have knowledge in planning and company operation may take part in this exercise. The landscaping process sets a linking relationship between the existing SWOT factors and the overall objective. SWOT analysis identifies relative changes in performance as soon as they occur and also compares different managerial occurrences as well as foreseeing the alternatives to performance change, (Kitts, Edvinsson & Beding, 2000, p.8). Conclusion In conclusion, SWOT model is only a tool of strategic planning, no one prove that it is a perfect process. Therefore, the users need to borrow and learn from literature in corporate strategic planning. Given the evidence that SWOT has also resulted in a number of successful organizations despites its limitations, strategic planning teams ought to use it with care; considering the organization’s financial status with sensitivity. List of References Armstrong. M 2006, A handbook of Human Resource Management Practice (10th edition), Kogan Page, London ISBN 0-7494-4631-5 Armstrong. M 1982, Management Processes and Functions, London CIPD ISBN 0-85292-438-0 Bertelsen, B 2012, Everything you need to know about SWOT analysis. [Newmarket, Ont.], Brain Mass Inc. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=529731. Kitts B. Edvinsson L. & Beding T 2000, Crystallizing knowledge of historical company performance into interactive, query-able 3D Landscapes http://de.scientificcommons.org/534302 Chermack, Thomas J. & Bernadette K. Kasshanna (December 2007). "The Use of and Misuse of SWOT analysis and implications for HRD professionals". Human Resource Development International 10 (4): 383–399. Weihrich, H 2001, "The TOWS Matrix. A Tool for Situational Analysis". Hill, T. & R. 1997, "SWOT Analysis: It’s Time for a Product Recall". Long Range Planning 30 (1): 46–52. doi:10.1016/S0024-6301(96)00095-7. Humphrey, A 2005, "SWOT Analysis for Management Consulting". SRI Alumni Newsletter (SRI International). Jackson, S 2010, "Recent Research on Team and Organizational Diversity: SWOT Analysis and Implications." Journal of Management: 801-30. Koch, Adam (2000). "SWOT does not need to be recalled: It needs to be enhanced". Swineburne University of Technology. Menon, A. et al. (1999). "Antecedents and Consequences of Marketing Strategy Making". Journal of Marketing (American Marketing Association) 63 (2): 18–40. doi:10.2307/1251943. JSTOR 1251943. Quincy, Ronald. (2000) "SWOT Analysis: Raising capacity of your organization". Rutgers School of Social Work. Retrieved 2015-03-05. Start, D. and Hovland, I. (2004): SWOT Analysis, Tools for Policy Impact: A Handbook for Researchers,OverseasDevelopment (Accessed March 5, 2015)- Institute, "RadioShack Corporation SWOT Analysis - EBSCO Online Library ..." EBSCO Online Library. January 1, 2013. Accessed March 5, 2015. . Business Development Services (BDS) Forum, ‘Complete manual for SWOT analysis’, Accessed March 5, 2015 http://www.bds-forum.net/m+e.htm "Coca Cola Company Profile-SWOT Analysis." January 1, 2013. 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