PRESENTATION

ON

SWOT ANALYSIS
Presented By:

B. Aditya Aloke
Symbiosis Center for Information Technology, Pune

SWOT
STRENGTH

WEAKNESS
OPPURTUNITIES

THREATS

But what is SWOT ????

WHAT IS SWOT ?
A way of painting 360 degree Picture of some situation or product offering.
A Vision to establish the starting point for development of Strategies. An analytical, strategic business development analysis and planning tool

INPUT :
Sound Knowledge of Present Situations and Trends.

OUTPUT :
Structured Basic Information Giving the Understanding of Reality and Strategic Options.

WHY SWOT ?
Tool in Information Gathering and Planning Process.

Sound Knowledge of Present Situation and Trends.

Output Obtained is Structured.

Low cost way of analysis.

Fairly Simple.

Provides Clear vision for Setting goals and Objectives.

BASIS OF SWOT
It is grounded in the basic principle that strategymaking efforts must aim at producing a good fit between :

COMPANYS RESOURCE CAPABILITY & ITS EXTERNAL SITUATIONS

AIM OF SWOT
From a Firms Perspective :
Sizing up :

Firms Strength and Weaknesses. Firms Opportunities and Threats. Firms Resource Capabilities and Deficiencies.
Simply Speaking :

A clear Overview of the Firms Business Position.

USING METHODOLOGY OF SWOT

Internal Analysis
Organizations Organizations Strength Weakness

External Analysis
Opportunities to the Org. Threats to the Org.

Where do internal and external factors meet?

WHAT CAN WE DO ABOUT IT?

Internal Situation Given by : Strength Weakness

Internal Asset of Know How Internal condition

Technology
Motivation Entrepreneurship Spirit Finance Business Links

Internal Deficit
Endangers the Competitive Position of any Product / Service.

Whatever Helps u to Exploit Opportunities and fight off threats.

Whatever Hampers the exploitation of Opportunities

External Environment Given by :

Opportunity

Threats
Unfavorable Trend
External circumstance

Characteristic or Any External Circumstance which favors the demand of the product or service. Wherever company is enjoying an advantage

Leading to unfavorable influence on the Companys position.

PRINCIPLES OF SWOT Strategic Focus

Strengths and Weaknesses

Opportunities and Threats

Time Frame

Common Pitfalls

Strengths

The power that holds the structure

Weaknesses

The pressure that leads to the downfall

Strength
It is the one which is done well by the company It is the one which makes the company establish itself strongly in the market It is the one which gives the company the efficiency to utilize the opportunities and the confidence to fight the threats It is the one which gives the company a unique recognition in the marketplace

Analyzing Strengths
This analysis helps to make major decisions in the organization This analysis serves as the important aspect in the estimation of the performance of the company This analysis also helps in comparing the companys performance with its competitors

Forms of Strengths
Good Skill or Expertise Physical Assets Human Assets Organizational Assets Intangible Assets Competitive Capabilities Achievements Alliances

Building Competitive Advantage on Company Resources

Competitive Advantage

Strategic Assets and Market Achievements

Core and Distinctive Competencies Competitive Capabilities

Company Resources

Weakness
It is the one which acts as a disadvantage to the company It is the one which causes the downfall of the company It is the one which makes the company lose the marketplace It is the one which gives the company an instability in the market

Forms of Weaknesses
Inefficient Skill or Expertise Lack of Valuable Assets Weak Competitive Capabilities

Companys Competence
Critical component in assessing companys situation Learning and buildup of real proficiency Competencies are consciously built and developed To develop organizational ability

Examples of competence
Skills in merchandising and product display Expertise in specific technology Select good locations for retail outlets Working with customers on new applications Expertise in just-in-time inventory practices

Competitive Capability
Customers deem the competence valuable and beneficial Helps differentiate a company from competitors and enhances its competitiveness All are not equal some just survive and others hold potential for changing basis of competition

Core Competencies
Competitively important internal activity done very well. It is done better than other internal activities It becomes core competence as it is central to a companys competitiveness and profitability Examples of core competencies

Continued
Can have more than one in resource portfolio. Qualifies as a genuine company strength and resource It resides in its people and intellectual capital and not in its assets Cross-department and cross-functional combinations of skills, resources and technologies

Distinctive Competencies
Competitively superior competence how good is it relative to competitors competencies Core competence doesnt become distinctive competence unless a company performs that activity better than its rivals A core competence becomes a basis for competitive advantage only when it is a distinctive competence

Examples of Distinctive Competence

Sharps corporation - flat panel display Toyota and Honda low cost, high quality, design-to-market motor cycles Intel new generations of powerful semiconductor chips Motorola defect-free manufacture of cellular telephone equipment Rubbermaid innovative rubber and plastic products

Importance
Its importance in strategy making lies with:
Competitively valuable capability Its potential of being a corner stone of strategy Competitive edge it produces in the marketplace

Competitive Advantage
Distinctive competence in activities important to market success Rival companies do not have offsetting competencies Costly and time consuming for rivals to imitate the competence

Competitive Value
Unique to each company Tests to qualify for sustainable competitive advantage:
Is the resource hard to copy? The more it is difficult and expensive to copy, the greater is its potential competitive value How long does the resource last? The longer the resource lasts, the greater is its value Is the resource really competitively superior? Companies should always keep the resource competitively superior than its rivals Can it be trumped by resources-capabilities of rivals?

Competitively Superior Resources

Most companies resources are not competitively superior to pass the tests Most businesses have mixed bag of resources Only strongest industry leaders posses competitively superior resource Significant competitive advantage from collection of good to adequate resources for example, Toshibas laptop computers

Matching Strategy
Create competitive advantage
Managers need to take decisive remedial action to upgrade existing organizational resources and capabilities Managers have to look towards correcting competitive weaknesses

Strategy making principle:

A companys strategy should be tailored to fit its resourcestaking both strengths and weaknesses into account. As a rule, managers should build their strategies around exploiting and leveraging company capabilities and avoid strategies that place heavy demands on areas where the company is weakest or has unproven ability.

Selecting Competences and Capabilities

It is the essence of astute strategy making Selection is done to concentrate on and use to underpin the strategy Sometimes companies already posses valuable competences and capabilities that strengthen the resource base Sometimes the desired competences and capabilities have to be developed internally or acquire through alliances having the expertise

OPPORTUNITIES

Opportunities
One of the factors outside ones organization which determine ones success or failure in the market place. Managers cant properly tailor strategy to the companys situation without first identifying each company opportunity and appraising the growth and the profit potential each one holds, depending on the prevailing circumstances Can be plentiful or scarce and can range from wildly attractive to marginally interesting

 The market opportunities most relevant to a company are those that offer: Important avenues for profitable growth Those where a company has the most potential for competitive advantage Those that match up well the companys financial and organizational resource capabilities. Not every company in an industry is equipped with the resources to successfully pursue each opportunity that exists in the industry.

Threats
Factors in a companys external environment pose threats to its profitability and competitive well-being External threats may pose a degree of adversity Threats to a company may be:

Emergence of cheaper or better technologies

Rivals introduction of new or improved products

the entry of lower-cost foreign competitors into a companys market stronghold new regulations that are more burdensome to a company than to its competitors vulnerability to a rise in interest rates the potential of a hostile takeover

unfavorable demographic shifts

adverse changes in foreign exchange rates

political upheaval in a foreign country where the company has facilities It is managements job to identify the threats to the companys future well-being and to evaluate what strategic action can be taken to neutralize or lessen their impact.

SWOT ANALYSIS

Infosys Technologies Limited

Strengths
Top Management Employee as a business partner Quality standards Client rooster Brand Image

Top Management
The chairman and CEO Mr. N. R. Narayana Murthy known as top businessman. The companys top management has established a value system because it believes that if a corporation wants to run a marathon, it requires a value system.

The top management has the vision of a global growth strategy and positions the company as a learning organization.

Employee as a business partner

Infosys is also known for its stated objective of 'WEALTH CREATION FOR EMPLOYEES' .

The employee stock option plan (ESOP) helps them build their assets. With the ESOP, the employee becomes a true partner in the growth of the company and shares in the rewards created by the same.
They even offer a marriage loan to take care of employee's wedding expenses. Also facility of career loans. Infosys has 100 karodpatis and 1800 lakhpatis working with it including Mr. Murthy s driver.

Quality Standards
The Quality Standards at Infosys match the best in the world.

It uses a process oriented approach to project execution.

Infosys was the first Indian company to get immediate ISO 9001/TickIt certification from "Bureau Veritas Quality International (BVQi)". Infosys has been assessed at Level 5 of the Capability Maturity Model (CMM) of the Software Engineering Institute, which evaluates Development, Re-engineering and Maintenance processes across the enterprise.

Client Rooster
Growth can only come from repeat business and trust relationships. The company boasts of regular clientele from MNCs like Nestle, Reebok and Apple and alliances with global giants like SAP. It actually plays a strategic role by helping clients sharpen their edge over competitors.

Brand Image
Infosys has recently declared that it is worth Rs. 1726.9 crores ($411.2 million) as a brand. This is the extra value that the name grants to the company.

WEAKENESSES
Concentration on customized software packages.
Dependence on U.S.A. markets.

Lower productivity of employees in global standards

Concentration on customized software packages

Customised software packages mainly account for the companys revenue(96%). This gets rarely gets high media publicity which is very important for the public image.

Dependence on USA Market Earnings from the U.S.A. software market account for four-fifths of the companys revenues.

Lower productivity of employees in global standards

The current productivity of an Infosys' employee is US$ 50,000 as against a US industry average of US$ of 100,000, and US$ 190,000 for Cambridge Technology Partners, the US industry's most productive company. Important point as company is aspiring to be a global player in the software market.

Opportunities
Establishing software development centers in America, Asia (Far East), and Europe. Growth.

Establishing software development centers in America, Asia (Far East), and Europe

This will give the company 24-hour software development capability, as it will be operating in multiple time zones.

Growth
By raising money through a $75m ADR (American Depository Receipts) issue to fund its acquisition and marketing plans, the company plans to acquire brands/companies in other markets to fuel growth.
Another aim is to attract global talent by issuing stock options in convertible currency.

Threats
Increase in cost.
Increasing competition. Usage of similar names by unscrupulous companies. Government Policies regarding foreign acquisitions.

Increase in Cost
The reason of the success of the Indian software market is its cost advantages.

Increasing Competition Infosys in its path of globalization finds competition growing both above it and around it.

Usage of Similar Names by unscrupulous Companies

The trademark Infosys has been used by many companies.

Government Policies regarding foreign acquisitions

There is currently a capital of $100 million on automatic approvals on foreign investments.

To get through the procedures of the RBI for special approvals will result a loss of time and the possibility of loss of an opportunity.

Mc Donalds

McHistory
Ray Kroc opens the Des Plaines restaurant in 1955. First days revenues - $366.12 In 1965, McDonalds goes public with the companys first offering on the stock exchange. In 1967, Jim Delligatti invents the Big Mac Makadonaldo first opened in 1971 (Japan)

McHistory
Egg McMuffin is introduced in 1973; Developed by owner operator Herb Peterson
In 1974 Fred Hill of the Philadelphia Eagles teams up with McDonalds to create the Ronald McDonald House Happy Meals (1979)

Fascinating McFacts
Today, the company operates more than 23,500 restaurants in 109 countries Since its founding in 1955, McDonalds has sold well over 100 billion hamburgers McDonalds prepares more than 6.8 million pounds of French fries every day

More than 50,000 students have graduated from Hamburger University

Franchising McFacts
Approximately 85% of McDonalds restaurant businesses world-wide are owned and operated by franchisees.
All franchisees are independent, full-time operators.

SWOT Analysis - Strengths

Brand Equityworld-wide

42% of US fast-food hamburger business

Consistency of food

Successful items: Fries, Happy Meal, Big Mac, Egg McMuffin, Promotions
Overseas market Balance sheet position

SWOT Analysis - Weaknesses

Declining market share
Weak product development Disgruntled franchisees Quality and taste of products

Whose food do Americans really like best?

Best-tasting burgers?
Burger King Wendys McDonalds 42% 32% 17%

Best-tasting food?
Wendys Burger King McDonalds 36%* 32% 21%

SWOT Analysis - Weaknesses

Declining market share
Weak product development Disgruntled franchisees Quality and taste of products

SWOT Analysis - Opportunities

International expansion Only serving 1% of the worlds population Growing dining-out market

SWOT Analysis - Threats

Mature/over-stored industry
Strength of competition More health-conscious consumers Changing demographics Fluctuation of foreign exchange rates; Economies

COLA WAR

The Cola War

Introduction
Coca-Cola and PepsiCo have been the leading soft drink companies for decades. An ongoing battle for market share has existed between these firms for over 75 years. Each company has tried a number of strategies to gain a sustainable competitive advantage. These strategies included: Introducing new soft drink products Diversification Aggressive advertising campaigns

The Cola War

Strengths
Coca-Cola Company Maintains global soft drink industry leadership Positioned as a world-wide company acting locally Maintains its major focus on world-wide expansion of the cola market PepsiCo Has achieved major success with both beverages and snack foods Recent divestment of successful restaurant chains allows focus on cola wars Has strong Brand Equity

The Cola War

Weaknesses
Coca-Cola Company Relationships with bottling subsidiaries could create territorial and other legal problems Large regional bottlers may not have the financial resources to continue expansion. PepsiCo Must split focus between managing soft drink lines and snack foods lines Organizational structure for international sales of cola products may not be as strong as Coca-Colas.

The Cola War

Opportunities
Coca-Cola Company World-wide economic development and population growth to sustain sales and profits Strong brand names and world-wide identity as a leader in the soft drink industry
PepsiCo

World-wide economic development and population growth to sustain sales and profits Strong brand names and world-wide identity as a leader in the soft drink industry

The Cola War

Threats
Coca-Cola Company Political and economic instability in many developing regions of the world Competition from other national, regional, and global soft drink Companies PepsiCo Political and economic instability in many developing regions of the world Competition from other national, regional, and global soft drink Companies

MICROSOFT CORPORATION

Microsoft Corporation SWOT Analysis

Strengths World's largest software company with global name recognition and strong reputation for innovative products Revenues and profits rising at 30% a year with merger/acquisition or investment in 92 companies over past five years

Loyal, hardworking, and diverse workforce (20% minority, 26% women) who, in addition to good compensation, have an opportunity to do well financially through stock purchases

Windows 95, 98, 2000 series, and Windows NT are globally known as the PC desktop operating system with a market share of about 88% Relatively rapid product development processes that allow for timely updating and release of new products Software products have high name recognition, broadbased corporate and consumer acceptance (Word, Excel, PowerPoint, Access), and numerous powerful features that are in use worldwide Top rating from Fortune for best company to work at and most admired company .

Weaknesses Between 1990-1995, Microsoft leadership failed to correctly anticipate the growth or popularity of the Internet

Bill Gates has become Microsoft's chief software architect but has not yet developed a substantially new line of products
Dependency on hardware manufacturers to pre-install Microsoft's PC operating system

Downside of product launches and deadlines contributes substantially to employee burnout

Employee turnover has increased from 6% for a ten year period to 7.4%
Falling sales in the operating systems and server software sectors Little or no significant presence in the wireless market and Windows CE has been disappointing Not a key player in the Internet space and few products for Internet applications Products have a single application focus and do not work well with or on-top of other products

Opportunities Cheaper global telecommunication costs open new markets as people connect to the Internet. Mobile phone applications and exploitation of personal digital assistants represent a growth industry so that strategic alliances could provide Microsoft with opportunity in a market where it currently has little or no significant presence. Popularity among people for Internet access The demand for personal computers in American and global markets remains strong despite the growth and increasing popularity of personal handheld devices .

Threats Apple and Linux threaten Microsoft's 88% market share of the desktop operating market Between 1993-95, Sun Microsystems, Netscape, Oracle, IBM, AOL, and other companies moved into the Internet space and defined it while Microsoft failed to anticipate its growth or popularity Currency exchange rates affect demand for application/operation software and hardware, and fluctuating currencies can negatively impact revenues in the global marketplace

Department of Justice antitrust litigation and current appeal creates uncertainty among employees since its outcome is not known
Hardware manufacturers (Sun Microsystems, Oracle, IBM) have collaborated on new platform technologies that replicate much of the value of Windows Growing Linux Influence year by year.

Rapid development of mobile devices that will displace/replace personal computers

Software piracy of commercial and consumer applications software on a global scale threatens revenue streams Technology life cycle is shorter and shorter

Unix dominates high-end mission-critical applications and its customers do not believe Windows can handle these operations

References
Strategic Management by Phillips Kotler
Case Study : Cola War By Lon Camomile College of Business Case Study: Mc Donalds By Bob Wilcox Case Study : Infosys By Mr. Srinivas
Business Environment Planning

Thanks for your Patience !!