SWOT Analysis

All business students are assigned to conduct SWOT analysis, usually at the
earlier stages of their studies. This page focuses on the application of SWOT
analysis in a business context as a part of academic assignment. This is a
comprehensive SWOT resource and it contains an explanation of SWOT theory,
an illustration of how to do a SWOT analysis and links to examples of SWOT
analysis of major multinational brands. Moreover, SWOT analysis template
further below can be used to generate SWOT tables of more than 100
multinational companies along a range of industries.

SWOT Analysis: Theory

SWOT is a strategic analytical tool for assessing strengths and weaknesses of a
business, analyzing opportunities available to the business, as well as, threats
faced by the business. SWOT analysis can be used at organizational and personal
levels.

As it is illustrated below, strengths and weaknesses are internal, i.e. businesses

are able to influence and to manipulate with their strengths and weaknesses.
Opportunities and threats, on the other hand, are external, meaning that
businesses can only react to opportunities and threats and businesses do not have
tools to influence opportunities and threats.

Strengths: attributes, characteristics and factors that give competitive advantage to the
businessFor example, considerable brand value of the business, cash reserves, first mover
advantage and exclusive access to unique resources are major strengths that contribute to
competitive advantage of the business.
Internal

Weaknesses: attributes, characteristics and factors that weaken competitiveness of the

business in the marketplace.A history of defective products, presence of huge debts and
high employee turnover are examples of major weaknesses that a company may have.

Opportunities: favorable situations and factors that can strengthen competitive advantage
of the business or provide the business with new sources of competitive advantageThe list
of major opportunities for a business may include new product development, finding new
customer segment for existing products, opportunities for further cost reductions thanks to
creativity and technological innovations and others.
External
Threats: unfavorable situations and factors that could create problems for the business
compromising its competitive advantage to a certain extent.The most noteworthy threats
faced by businesses include, but not limited to the loss of key members of workforce,
Increase in the prices of raw resources, patent infringement and other lawsuits against the
company and others.

SWOT analysis has important practical implications. Specifically, with findings of

SWOT analysis in their hands, the senior level management identify and built
upon their strengths, discover new opportunities and work upon eliminating or
minimising threats to the business. Accordingly, SWOT can be a powerful aid for
senior level management to develop appropriate strategy for the business.
The majority of sources explaining SWOT analysis assume that their audience is
businesses aiming to improve their operational efficiency. This portal, on the
contrary, explains SWOT analysis assuming that you a business student and you
have been assigned to conduct SWOT analysis as a part of your assignment.

How to do SWOT Analysis

You can conduct a SWOT analysis on the basis of the following four steps:

Step 1: Selection of the company

If your assignment requires conducting a SWOT analysis, you are either given a
case study company by your educational institution or you are free to analyze a
company of your choice. In the first scenario, you have no option but to conduct a
SWOT analysis of the company named in your assignment instructions. However,
the majority of educational institutions grant students the flexibility to conduct
SWOT analysis of a company of their choice.

Students are often tempted to conduct SWOT analysis of their employer.

Choosing your employer as a case study can be a good strategy if you have an
access to detailed relevant information. Please note that only descriptive
information would not suffice and you will have to justify your arguments by
referring to relevant quantitative data. Therefore, if you are not able to find
relevant quantitative data about your employer or you do not have an employer
or you do not want to analyze your employer for whatever reason, your best
choice could be to conduct SWOT analysis of a multinational enterprise. This is
due to the availability of data about the majority multinational enterprises. This
portal offers up-to-date sample SWOT analyses of the most famous multinational
enterprises as part of company reports.

Step 2: Finding information

If you are conducting a SWOT analysis of a small or medium sized organization

such as your employer, family business or a company you are related to in some
ways, approaching the company directly may prove to be an efficient strategy to
obtain required information. You may try to secure a meeting with a senior level
manager and explain practical implications of your SWOT analysis for the
business. In other words, you may be able to convince a senior manager that
results of your SWOT analysis may provide an important insight into the
business and managers can act upon this knowledge to increase the efficiency of
the business at various fronts.

Alternatively, if you are conducting SWOT analysis of a multinational enterprise,

company annual report is usually the most comprehensive source of the relevant
information. Note that annual reports highlight information about strengths of
the business within the first few pages and you cannot find information about
weaknesses of a company in its annual report for obvious reasons.

Information about Strengths in SWOT Analysis

Information about strengths of the company is easiest to find in your SWOT

analysis. Strengths are competitive advantages of the business that made it
successful in the first place. In case of small or medium sized organizations, the
manager you are interviewing will be happy to discuss the strengths of the
business.

In case of multinational companies, on the other hand, the first few pages of
annual reports boast about competitive advantages of the business by referring to
specific figures and charts. Using some of these charts in your assignment and
properly referencing the source is going to increase the quality of your work.

The following table illustrates the major strengths possessed by business and tips
about how to discuss these strengths in your swot analysis:
Strengths Tips/Notes

Competitive prices Mention this point if the company follows cost leadership business strategy

Perceived high quality of

Mention this point of the company follows differentiation business strategy
products and services

Brand value of the Mention and discuss specific figure by referring to reliable source such
business as Forbes The Most Valuable Brands

Mention the amount of revenues and profits generated by the business

Solid financial position during the last financial year. Reference the interviewee (in case of small
and medium businesses) or annual report (in case multinational businesses)

Discuss the point of focus of the brand. For example, PepsiCo has a large
Focused brand portfolio
brand portfolio that focuses on drinks and snacks only.

First mover advantage Discuss the benefits of first mover advantage

Leadership position in Mention and discuss the market share of the company in the local or global
the market marketplace

Access to unique Discuss specific resources and their importance in terms of gaining
resources competitive advantage

High level of consumer If possible mention statistical data such as the number of consumers, the
loyalty percentage of repeat purchases etc. by referring to reliable sources
Efficient leadership by a
Briefly discuss specific achievements and personal qualities of the CEO
charismatic CEO

Benefits from the Use statistical data from reliable sources to illustrate the extent of benefits
economies of scale derived from the economies of scale

Strong patent portfolio Mention the names of the most important patents and respective dates

Positive reputation for

Briefly mention specific CSR policies, programs and initiatives that earned
conducting ethical
the company reputation as an ethical business
business

Organizational culture
Discuss important aspects of organizational culture and ways in which these
based on innovation and
aspects increase competitiveness of the business
creativity

Convenient location of
Discuss the patterns of location of the business and its importance
the business

Information about Weaknesses in SWOT Analysis

It may not be easy to find information about weaknesses of small and medium
sized businesses. The manager you are interviewing may not want to discuss
weaknesses of their business either intentionally, or they may not be aware of
weaknesses. It is important for you to motivate your interviewee to discuss
weaknesses of their company by asking relevant questions in a polite way.

It is easier with multinational organizations. An extensive online research can

reveal relevant information about weaknesses associated with the company you
are analyzing.The majority of big corporations have been involved in some kind
of scandals during the past two years and you can discuss the damage of these
scandals to the brand image as noteworthy weakness of the company.
For example, suppose you have chosen Coca Cola Company for your SWOT
analysis assignment. If you google the term Coca Cola scandal, search results on
the top relate to a scandal where the company funded obesity research that
downplayed the negative health implications of Coca Cola products. Negative
implications of this incident on Coca Cola brand image is brands weakness you
can discuss in you SWOT analysis.

All arguments and numbers need to be referenced using referencing style

imposed by your educational institution in an appropriate manner and
preference has to be given to online journals and magazines over online
discussion forums and personal blogs.

Major weaknesses of businesses and brief tips about discussing them in your
assignment are illustrated in the following table:

Weaknesses Tips/Notes

Mainly relates to companies pursuing cost leadership business strategy.

Weak or unsustainable
Discuss the nature of competitive advantage and explain why it is
competitive advantage
unsustainable

High cost of products or

Mainly relates to companies pursuing differentiation business strategy
services

Damage to brand image by Refer to specific incidents mentioning relevant statistical data and do not
CSR-related incidents forget to reference the data

Extensive dependence on a Name the suppliers and the type of resources supplied by them and
few suppliers discuss the bargaining power of suppliers

Specify the amount of debts in numbers and reference to a reliable

Presence of huge debts
source
 Discuss specific inefficiencies of companys cost structure and their
Ineffective cost structure
negative implications for the business

Unfocused product Discuss the categories of companys product portfolio, illustrating the
portfolio lack of focus and its implications for the business

Gaps in capabilities of the Refer to specific gaps such as lack of new product development
company capabilities, absence of online sales channel and others.

Specify the main reasons for low employee morale and commitment
Low employee morale and
such as low wages and autocratic management style and discuss their
commitment
negative implications for the business

Refer to specific product names and models, mention dates and numbers
History of product recalls
recalled discuss the damage of the incident to the brand image

Difficulties with the access

Explain the nature of difficulties, their causes and implications
to distribution channels

Business model can be

Discuss the weakness of competitive advantage and its vulnerability for
easily replicated by
replication by competitors
competitors

Discuss the reasons for high employee turnover and its negative
High employee turnover
implications for the business for short-term and long-term perspectives

Information about Opportunities in SWOT Analysis

Information about opportunities available to the business can be derived from its
weaknesses in a way that businesses often have an opportunity to turn their
weaknesses into strengths. At the same time, it is important that your SWOT
analysis also identifies a set of opportunities that are not related to the
weaknesses.If you cant think of any company-specific opportunities, you can
discuss business opportunities that can be explored by any business in general,
such as new product development, international market expansion and
increasing the level of effectiveness of social media marketing.

The following table illustrates the major opportunities available for businesses
and tips about how to discuss these opportunities in your SWOT analysis:

Opportunities Tips/Notes

Opportunities for further This can be achieved thanks to creativity and innovations and other
cost reductions measures

Refer to new product categories and specific products justify your

New product development
argument by discussing the demand for them

International market Discuss the ways in which establishing presence or increasing presence
expansion with the focus on in emerging economies such as China and India is going to benefit the
emerging economies company in long-term perspective

Finding and exploiting new Be specific in highlighting new potential sources of competitive
sources of competitive advantage taking into account industry-specific and company-specific
advantage factors

Refer to contemporary social media marketing practices that are not

Increasing the effectiveness
currently utilized by the company and discuss potential benefits of their
of social media marketing
utilization

Engaging in mergers and Discuss potential target companies for mergers and acquisitions and
acquisitions explain potential benefits
Formation of strategic Explain target companies for strategic alliances, discuss the nature of
alliances alliances and potential benefits

Finding new customer Specify the potential customer segment by referring to geographic,
segment demographic, behavioural and psychographic bases of segmentation

Increasing operational
Discuss specific types of technologies that can contribute to the
effectiveness via investing
operational effectiveness of the business
in technology

Emergence of competitor Explain specific types of competitor vulnerabilities and ways in which
vulnerabilities they can benefit the case study company

Information about Threats in SWOT Analysis

Threats faced by the business can be classified into two categories. Firstly, there
are company-specific threats that stem from company-specific factors such as the
threat of losing market share due to ineffective cost structure or the threat of
negative media coverage and damage to the brand image due to neglecting the
importance of corporate social responsibility. Secondly, there are threats to the
industry or to the economy on the whole, such as a threat of introducing tariffs to
a certain range of products or the threat of a global economic and financial crisis.
You will need to find information about threats belonging to both categories with
more emphasis on the threats from the first category, i.e. company-specific
threats.

Main threat facing the majority of businesses and brief tips about discussing
them in your SWOT analysis are illustrated in the following table:

Threats Tips/Notes

Decline in the quality of This threat relates to businesses pursuing cost leadership business
service due to the further strategy. Refer to the latest cost reduction initiatives introduced by the
pursuit of cost reduction company

Emergence of new
Mention resources critical to the business and explain how competitors
competitors with access to
can potentially acquire these resources for less prices
cheaper resources

Emergence of substitute Refer to specific substitute products and services and discuss the level of
products and services their threat to companys existing product portfolio

Increase in the rate of Discuss the potential negative effects of inflation on the volume of
inflation revenues by referring to the present and past rates of inflation

Explain in which ways customer preferences may change by referring to

Changes in consumer tastes
social dynamics and discuss the negative implications of these changes
and preferences
to the business

Strengthening home country currency decreases the amount of reported

Changes in currency
profits from international sales. Illustrate this for the company of your
exchange rate
choice by referring to specific numbers from official sources

Increase in the prices of raw Mention the most critical resources for the business and illustrate how
resources increase of their prices decreases the amount of profits

Refer to major international markets for the company and illustrate

Introduction of trade
potential negative implications for the business, if trade barriers are
barriers
introduced

Inability to sustain
competitive advantage Refer to major competitive advantages for the business and explain why
the company may not be able to sustain them in the long-term
 perspective

Patent infringement and

Refer to previous patent infringement incidents the company was
other lawsuits against the
involved (if were are any) and discuss relevant risks in the future
company

Refer to key members of the company, their contribution to companys

Loss of key members of
success and potential negative implications of their departure from the
workforce
business.

Emergence of CSR-related Refer to past CSR scandals faced by the company and discuss the risks
scandals of future scandals and their implications

Natural disasters such as earthquakes and flooding are generic threats for
Natural disasters all businesses. You can discuss this point when you have already
discussed all other threats, but still didnt reach the required wordcount

Another generic threat that can be applied towards many businesses

Risk of a financial crisis
pursuing differentiation business strategy

Step 3: Writing

You can structure your writing in the following way:

Firstly,you will need to discuss the company profile, its strategy and the most
recent changes that have taken place in the company prior to presenting your
SWOT analysis. The length of such a discussion depends on your assignment
instructions and the total word count for your assignment.

Secondly, you can develop a table containing four sections headed strengths,
weaknesses, opportunities and threats. Major strengths, weaknesses,
opportunities and threats of your chosen company can be presented in bullet
points under respective boxes. This can be followed by more detailed discussions
of bullet points ideally using statistical data and referencing the data.