SWOT & STEEPLE Analysis

Delivered by Jeffery Lim

+84 377373896 [email protected]
@2007, Huong
SWOT ANALYSIS
SWOT is an acronym for the four components the technique
examines:

• Strengths: characteristics of the business or project that give it an advantage over

others

• Weaknesses: characteristics that place the business or project at a disadvantage

relative to others

• Opportunities: elements in the environment that the business or project could exploit to
its advantage

• Threats: elements in the environment that could cause trouble for the business or
project
SWOT analysis (or SWOT matrix) is a strategic planning and strategic
management technique used to help a person or organization identify Strengths, Weaknesses,
Opportunities, and Threats related to business competition or project planning.

It is sometimes called situational assessment or situational analysis. Additional acronyms using

the same components include TOWS and WOTS-UP.

This technique is designed for use in the preliminary stages of decision-making processes and
can be used as a tool for evaluation of the strategic position of organizations of many kinds (for-
profit enterprises, local and national governments, NGOs, etc.).

It is intended to identify the internal and external factors that are favorable and unfavorable to
achieving the objectives of the venture or project. Users of a SWOT analysis often ask and
answer questions to generate meaningful information for each category to make the tool useful
and identify their competitive advantage.

SWOT has been described as a tried-and-true tool of strategic analysis, but has also been
criticized for its limitations, and alternatives have been developed.
Internal and external factors
Strengths and weaknesses are usually considered internal, while opportunities and threats are
usually considered external. The degree to which the internal strengths of the firm matches with the
external opportunities is expressed by the concept of strategic fit.

Internal factors are viewed as strengths or weaknesses depending upon their effect on the
organization's objectives. What may represent strengths with respect to one objective may be
weaknesses (distractions, competition) for another objective. The factors may
include personnel, finance, manufacturing capabilities, and all of the marketing mix's 4Ps.

External factors include macroeconomics, technological change, legislation, and sociocultural

changes, as well as changes in the marketplace.
A number of authors advocate assessing external factors before internal factors.[2][7][11]
SWOT analysis has been used at different levels of analysis in many arenas, not just
in profit-seeking organizations.

Examples include non-profit organizations, governmental units, and individuals.

SWOT analysis may also be used in pre-crisis planning and preventive crisis management.

SWOT analysis may also be used in creating a recommendation during a viability study/survey.
Strategy building
SWOT analysis can be used to build organizational or personal strategy. Steps necessary to execute
strategy-oriented analysis involve identification of internal and external factors (often using the popular
2 × 2 matrix), selection and evaluation of the most important factors, and identification of relations
existing between internal and external features.

For instance, strong relations between strengths and opportunities can suggest good conditions in the
company and allow using an aggressive strategy. On the other hand, strong interactions between
weaknesses and threats could be analyzed as a potential warning and advice for using
a defensive strategy.

TOWS matrix combines each of the four components with another to examine four distinct strategies:
• WT strategy (mini–mini): Faced with external threats and internal weaknesses, how to minimize both
weaknesses and threats?
• WO strategy (mini–maxi): Faced with external opportunities and internal weaknesses, how to minimize
weaknesses and maximize opportunities?
• ST strategy (maxi–mini): Faced with external threats and internal strengths, how to minimize threats
and maximize strengths?
• SO strategy (maxi–maxi): Faced with external opportunities and internal strengths, how to maximize
both opportunities and strengths?
Matching and converting
One way of using SWOT is matching and converting.

Matching is used to find competitive advantage by matching the strengths to opportunities.

Another tactic is to convert weaknesses or threats into strengths or opportunities.

An example of a conversion strategy is to find new markets. If the threats or weaknesses

cannot be converted, a company should try to minimize or avoid them.
Corporate planning
SWOT alongside PEST/PESTLE can be used as a basis for the analysis of internal and environmental
factors.

Corporate planning includes steps such as:

• Setting objectives - defining what the organization is going to do
• Environmental scanning
• Internal appraisals of the organization - an assessment of the present situation as well as a portfolio of
products/services and an analysis of the product/service lifecycle
• Analysis of existing strategies - this should determine relevance from the results of an internal/external
appraisal, and may include gap analysis of environmental factors
• Defining strategic issues - key factors in the development of a corporate plan that the organization must
address
• Developing new/revised strategies - revised analysis of strategic issues may mean the objectives need
to change
• Establishing critical success factors - the achievement of objectives and strategy implementation
• Preparation of operational, resource, and projects plans for strategy implementation
• Monitoring all results - mapping against plans, taking corrective action, which may mean amending
objectives/strategies
Marketing Management

In competitor analysis, marketers build detailed profiles of each competitor in the market,
focusing especially on their relative competitive strengths and weaknesses using SWOT
analysis. Marketing managers will examine each competitor's cost structure, sources of profits,
resources and competencies, competitive positioning and product differentiation, degree
of vertical integration, historical responses to industry developments, and other factors.
Marketing management often finds it necessary to invest in research to collect the data required
to perform accurate marketing analysis. Accordingly, management often conducts market
research (alternately marketing research) to obtain this information. Marketers employ a variety
of techniques to conduct market research, but some of the more common include:

• Qualitative marketing research such as focus groups

• Quantitative marketing research such as statistical surveys
• Experimental techniques such as test markets
• Observational techniques such as ethnographic (on-site) observation

Marketing managers may also design and oversee various environmental scanning and
competitive intelligence processes to help identify trends and inform the company's marketing
analysis.
 STEEPLE
Analysis

Micro environment analysis (Porter’s 5 forces)

Internal analysis (SWOT/TOWS)
Scenario analysis

Strategy formulation
Implementation
Control