STRATEGIC

MANAGEMENT
Strategic Management - MGT7033
Strategic Management - MGT7033
Strategic Management - MGT7033
 THE SWOT ANALYSIS



INTERNAL FACTORS

STRENGTHS
(+)
WEAKNESSES
() * Examining an
organizations
S W strengths,
weaknesses,
O T
EXTERNAL FACTORS

opportunities and

threats.
OPPORTUNITIES THREATS
(+) ()
*Source:
https://www.ache.org/pdf/secure/gifts/Harrison_Chapter5.pdf
COLORFUL LEAVES SWOT ANALYSIS
 4 important questions:
What makes us strong?
What opportunities are in the marketplace
upon which we can capture?

What makes us weak?

What type of threat are out there that can undermine our
organization, its goal and its mission?
Strategic Management - MGT7033
 What makes you better than your
competitor?
What are the advantages you have
over your rivals?
STRENGTHS What do you offer that makes
you stand out from the rest?
What is your strongest business
asset?
What unique resources do you have?
 Are you making enough profit?
What can be improved?
In what areas do your competitors

WEAKNESSES
have the edge?
What necessary expertise or
manpower do you currently lack?
Do you have cash flow problems?
 What real opportunities are
present today?
What is going on around you
that seems to be useful?
From which recurring
OPPORTUNITY tendencies can you profit and
how?
What could be done today that
isnt being done?
What is missing on the market?
 What obstacles do you face?
What are your competitors doing?
Are quality standards or
specifications for your job,
products or services changing?
THREATS
Is changing technology
threatening your position?
Could any of your weaknesses
seriously threaten your business?
 INTERNAL
SWOT ENVIRONMENT
explore 2
types of
environment EXTERNAL
ENVIRONMENT
 INTERNAL ENVIRONMENT

WEAKNESS
STRENGTHS

Strategic Management - MGT7033

 EXTERNAL ENVIRONMENT

OPPORTUNITY
THREAT

Strategic Management - MGT7033

 Analyse Internal
Environment
Strategic Management - MGT7033
 SHIHA

Strategic Management - MGT7033

 Internal Analysis:
Understanding a business
in depth is the goal of
internal analysis.

This analysis is based on

resources and capabilities
of the firm.
Strategic Management - MGT7033
 RESOURCES
TANGIBLE INTANGIBLE HUMAN RESOURCES
easiest to largely invisible, productive
identify and but over time services human
evaluate: become more beings offer the
financial important to the firm in terms of
resources and firm than tangible
their skills,
physical assets assets because
are identified they can be a main knowledge,
and valued in the source for a reasoning, and
firms financial competitive decision-making
 RESOURCE MAIN CHARACTERISTICS KEY INDICATORS

TANGIBLE
Financial The firms borrowing Debt-to-equity ratio
capacity and its internal Ration of net cash to
funds generation determines capital expenses
its capacity to weather Credit rating
fluctuations in demand and
profits overtimes.

Physical The physical resources Resale value of

related to plan, equipment, assets
assets, technology, raw Age of capital
materials. Strategic Management - MGT7033 equipment
 RESOURCE MAIN CHARACTERISTICS KEY INDICATORS

TANGIBLE
Technological Stock of technology in the
form of proprietary technology
(copyright, patents, trade
secrets) and expertise in the
application of technology
(know-how).
Reputation Reputation with customers Brand recognition
through the ownership of brands, Price premium over
established relationships with competing brands
customers, reputation of the Percent of repeat buying
firms products and services. Level and consistency of
Reputation of the
Strategic company
Management - MGT7033 with company performance
 RESOURCE MAIN CHARACTERISTICS KEY INDICATORS

TANGIBLE

Human Training and expertise of Educational, technical

Resources employees determine the and professional
skills available to the firm. qualifications of
Adaptability of employees employees
determines key aspects of Compensation relative
strategic flexibility of the firm. to industry
Commitment and loyalty of Record of labor
employees determines the disputes
capacity of the firm to attain Employee turnover
and maintain competitive
advantage.
Strategic Management - MGT7033
Analyse External
Environment
Strategic Management - MGT7033
 Review the opportunities and threat
of the industry.
Market Look at the overall size of the
industry to get a feel for how many
companies offer similar product,
services, then we can research the
growth.
Review the system to obtain the
product in market.
Review demand.
Look a changes in the national and
global market that offer the
opportunities for new region.
 Interest rate that effect buying
power.
Economic
Refer the technology trends that
Trend
may can enhance or make a way
to you to process order.
Provide service ONLINE
MARKETING
Identify changing laws or
regulatory issues what can
effect your company
 Evaluate the performance of
competitors
Competitors
List their strength and weakness
to get a better idea in industry.
Review their marketing level and
effort about their product.
Examine their website and social
media pages to get feel for the
relationship they built with
customer to target market.
 Supplier Power: Powerful
suppliers can demand premium
prices and limit a companys
Suppliers profit.
Examples: differentiation of
inputs, supplier concentration,
importance of volume to supplier,
threat of forward integration,
cost relative to total purchases in
industry, and switching costs
What external factors affect your
business?
SOCIAL CHANGES
What are the current or emerging
trends in lifestyle, fashions, and
other components of culture? What
are their implications? What
demographic trends will affect the
market size of the industry? Do
these trends represent an
opportunity or a threat?

Examples: population growth, health

consciousness, age/gender
distribution, behavioral trends,
career attitudes, habits.
Strategic Management - MGT7033
 NEW TECHNOLOGY

Technological: trends that can

determine barriers to entry,
minimize production level and
influence outsourcing
decisions.

Examples: automation,
technology incentives,
research and development
activities.
Strategic Management - MGT7033
ECONOMIC ENVIRONMENT
What are the current or emerging
trends in lifestyle, fashions, and
other components of culture? What
are their implications? What
demographic trends will affect the
market size of the industry? Do
these trends represent an
opportunity or a threat?

Examples: population growth, health

consciousness, age/gender
distribution, behavioral trends,
career attitudes, habits.
Strategic Management - MGT7033
 POLITICAL & REGULATORY ENVIRONMENT

Political: to what degree

the government
intervenes in the
industry.

Examples: tax policy,

trade restrictions, tariffs,
political stability.
Strategic Management - MGT7033
Case Study
 GENERAL INFORMATION
First store opened in 1962 by Sam Walton. What started small,
with a single discount store and the simple idea of selling more
for less, has grown over the last 50 years into the largest
retailer in the world. Each week, over 260 million customers
and members visit their 11,695 stores under 59 banners in 28
countries and e-commerce websites in 11 countries. With
fiscal year 2017 revenue of $485.9 billion, Walmart employs
approximately 2.3 million associates worldwide. Walmart
continues to be a leader in sustainability, corporate
philanthropy and employment opportunity. Its all part of their
unwavering commitment to creating opportunities and
bringing value to customers and communities around the
world.
STRENGTHS (INTERNAL FORCES)
Global organizational size :
Give firm deep pockets to fund
growth and expansion.
Global supply chain :
provides business resilience from
market-specific risks
High efficiency of supply chain :
advanced technologies for monitoring
and controlling the movement of
products from suppliers to its stores.
Strategic Management - MGT7033
 STRENGTHS (INTERNAL FORCES)
Thin profit margins:
typical effect of using the cost
leadership strategy. Because
Walmart minimizes selling prices, it
also needs to minimize profit
margins and rely more on sales
volume
Easily copied business model:
The firm does not have significant
competitive differentiators, except
for its business size. Strategic Management - MGT7033
OPPORTUNITIES (EXTERNAL FORCES)
Expansion in developing countries:
based on their high-growth
economic condition.
Improvement in HR practices:
relate to the criticisms on the
companys employment practices
Improvement in quality standards:
concerns on the health effects of
using low-cost and sometimes low-
quality products. Strategic Management - MGT7033
 THREATS (EXTERNAL FORCES)
Aggressive competition:
other large retailers could use aggressive
marketing and strategies to capture some
of Walmarts customers
Healthy lifestyle trend:
many of the companys goods are not
healthful, organic or natural.
Small-scale/individual online selling:
small sellers or individuals can bypass
Walmart and use their own websites to sell
products to online consumers.
Strategic Management - MGT7033
Recommendations based on Walmarts SWOT Analysis
This SWOT analysis shows that Walmart must prioritize
using its strengths to exploit opportunities in the global
retail market. The companys weaknesses and threats
should be secondary priorities. Walmart can improve its
HR management standards and product quality
standards to improve firm performance. Also, the
company must continue expanding its business to
exploit economic opportunities in developing markets.
Walmarts strengths based on its global organizational
size, global supply chain, and high efficiency of the
supply chain can support aggressive global expansion in
foreign markets.
http://panmore.com/walmart-swot-analysis-recommendations-case-study
 Recommendations based on Walmarts SWOT Analysis
Wal-Mart is the largest retail firm in the world with strong
market position in the US. The company's strong market position
in the US provides economies of scale and enhances the brand
image to the company. It derived almost 75% of revenue from
the US market. However, the company faces stiff competition
with local players which can adversely affect the revenue and
profitability of Wal-Mart.
In order for Wal-Mart to stay at the top of their game and follow
the company strategy and achieve their key policy goals, they
are going to have deal better with their stakeholders and make
sure they guard their reputation well nevertheless they are
criticized by some community groups, women's rights groups,
labour union, grassroots organizations, resistance to union
representation and alleged sexism.
https://www.ukessays.com/essays/management/a-swot-analysis-of-wal-mart-management-essay.php
 THANK YOU

Strategic Management - MGT7033