BACKGROUND TO THE TOOL OF SWOT

The origins of the SWOT analysis technique is credited by

Albert Humphrey, who led a research project at Stanford
University in the 1960s and 1970s using data from top
companies. (Died 31st October 2005)
 
The goal was to identify why corporate planning failed.
The resulting research identified a number of key areas and
the tool used to explore each of the critical areas was called
SOFT analysis. 

Humphrey and the original research team used the categories

“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.

In 1964 Urick and Orr were presented with the analysis at a

conference in Dolder Grand (Zurich, Switzerland) and
SWOT ANALYSIS
Definition:
SWOT analysis is a tool or process that helps generate
information that is helpful in matching an organization or
group’s goals, programs, and capacities to the social
environment in which it operates in order to achieve its
goals.

Objective:
setting goals alone is not enough if a company is to achieve
maximum effectiveness and efficiency, there is also the
need for a company to study its external and internal
factors.

The external factor has more to do with the opportunities

and threats the environment has on the organization while
the internal deals with the individual strengths and
weakness within an organization.
Strengths:
Are the internal attributes , capabilities or
resources of the organization that is helpful and
can be used as a basis for developing a competitive
advantage and also to achieving the objective of
the organization

What do you do well (sales, marketing,

management etc)?

What are your assets(product, service)?

What are your core competences?

Where are you making money?

What experiences do you have?

Weaknesses:

Are the internal attributes of the organization or

group that are harmful to achieving its
objective

what do you need (customer service, accounting)?

Where do you lack resources?

What can you do better?

Where are you losing money?

Opportunities:
Are the external factors or conditions that are
helpful to achieving the objective of the
organization.

What new needs of customers could you meet?

What are the economic trends that benefit you?

What are the emerging political and social

opportunities?

What are the technological breakthroughs?

What niches have your competitors missed?

Threats:
Are the external factors or conditions that
are harmful to achieving the objective
of the organization.

What are the negative economic trends?

What are the negative political and social

trends?

Where are competitors about to bite you?

Where are you vulnerable?

 power •Change of government
in power

ECONOMIC •Price wars between •Low production cost

competitors
•Currency rate
•Change in Supply and
SOCIAL/CULTURAL •Change of lifestyle Change of lifestyle
demand
•Entrant into market with a
Entrant into market with a diverse c
•diverse culture
E-commerce or E-business
TECHNOLOGICAL •E-commerce or E-
business
•Changes in technological
•Changes in technological
MARKET gadgets
• Threat of new entrants •gadgets
Global demand for
products from each
•Threat of substitute goods industry

•Bargaining power of •Market vacated by an

suppliers ineffective competitor

•Bargaining power of •Monopoly

consumers
•Free Market
• Rivalry amongst
competitors
 AIM OF A SWOT ANALYSIS

Reveal your competitive advantages .

Analyze your prospects for sales, profitability and

product development .

Prepare your company for problems .

Allow for the development of contingency plans.

A SWOT analysis is a process to identify where

you are strong and vulnerable -- where you should
defend and attack.
Steps to successful swot
analysis
Swot matrix
For any organization to be able to develop
strategies to achieve competitive advantage, it
has to implement the swot matrix.

STRENGTHS WEAKNESSES

OPPORTUNITIES S-O strategy W-O strategy

THREATS S-T strategy W-T strategy

 S-O strategy:
Pursue opportunities that are a good fit for the organizations
strengths.

 W-O strategy:
Overcome weaknesses to pursue opportunities.

 S-T strategy:
Identify ways that the organization can use its strength to
reduce its external threats.

 W-T strategy:
Establish a protective plan to prevent the organizations
weaknesses from making it highly prone to external threats.
9
8
7
6
Arafat
5
Naufal
4
Raj
3 Yakubu
2
1
0
Responsible Active Effective Confident
Swot Matrix
Strengths Weakness
Teamwork Lack of
Confidence
Not Risk Takers
Opportunity Present as a team Overcome Lack of
confidence to
Presentation
present efficiently

Threats Use the power of Consider risk

teamwork to beat taking to avoid
Competition
competitors giving
competitors an
advantage
CONCLUSION
Strengths need to be maintained, built upon or
leveraged.

Weaknesses need to be remedied, changed or

stopped.

Opportunities need to be prioritized, captured,

built on and optimized.

Threats need to be countered or minimized and

managed.