WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
Threats and opportunities are concerned with factors and
A simple framework for evaluating resources is the
developments in the environment (i.e. the entity’s external
VIRO framework:
V: Value - Does the resource provide competitive
environment).
advantage?
A SWOT analysis might be presented as four lists, in a
R: Rarity - Do competitors own similar resources, or are the
cruciform chart, items are to be provided for each of the four
resources unique?
sections of strengths, weakness, opportunities and threats
I: Imitability - Would it be costly for competitors to imitate
(SWOT). Illustrative items have been provided, for a small
the resource or acquire it?
company producing pharmaceuticals products as an example
O: Organization - Is the entity organized to exploit its
below.
resources to best advantage?
Note that strengths and weaknesses should include
competences and capabilities as well as resources. In this
SWOT
ANALYSIS
AND
STRENGTHS
AND
example, the strengths relate to resources and the weaknesses
WEAKNESSES
relate to competences and capabilities, suggesting that the
SWOT analysis is a technique for analyzing strategic
entity might not be making the best use of its resources.
position and identifying key factors that might affect
Strengths
business strategy. These factors are both internal and
a. Extensive research knowledge
external to the entity.
b. Highly-skilled scientists in the workforce
SWOT analysis can also be explained in the context of
c. High investment in advanced equipment
identifying opportunities and threats in the environment. It is
d. Patents on six products
also used to identify strengths and weaknesses in the
e. High profit margins
resources, competences and capabilities of the entity.
Weaknesses
Strengths: Strengths are resources and competences that an
a. Slow progress with research projects
organization has, and the capabilities it has developed.
b. Poor record of converting research projects into new
Strengths in resources, competences and capabilities can be
product development
exploited and developed to create sustainable competitive
c. Recent increase in labor turnover
advantage.
Opportunities
Weaknesses: Weaknesses are resources, competences and
a. Strong growth in total market demand
capabilities that are deficient or lacking. These weaknesses
b. New scientific discoveries have not yet been fully
are preventing the entity from developing or sustaining
exploited
competitive advantage.
Threats
a. Recent merger of two major competitors
Identifying strengths and weaknesses
To identify strengths and weaknesses in an organization or
b. Risk of stricter regulation of new products
company’s operations or activities, management should
In order to prepare a SWOT analysis, it is necessary to:
consider the following:
a. Analyze the internal resources of the entity, and try
to identify strong points and weak points
RESOURCES
b. Analyze the external environment, and try to identify
Consider all the resources of the entity, and identify
opportunities and threats.
those that are significant and unique. Include the
An analysis might be prepared by a team of strategic
skills of management and other employees in the
managers, a think tank, a risk management committee or
organizations assessment. Management should also
another group of individuals within the entity.
consider the knowledge that the entity has
Using the technique
acquired, and its intellectual capital.
A typical 2-by-2 SWOT Matrix places internal factors along
Consider whether there are key resources that the
the top and external factors along the bottom. Analysis
entity lacks, but a competitor might have.
produces factors to fill in the four boxes. What gaps do you
recognize between stated goals and actual outcomes? Which
Competences
Consider all the activities and processes of the
SWOT factors are responsible for your company’s
entity and how it uses its resources. Identify the
shortcomings and successes? Management will need to think
competences of the entity and consider whether any
‘strategically’, by using basic SWOT analysis to identify the
of these are core competences that provide
issues necessary for further discussion and brainstorming that
competitive advantage.
will generate strategies and action from:
Consider the competences that the entity lacks.
Strengths - Analysis of the organic business,
Weakness - Analysis of competitors,
Capabilities
Consider the capabilities of the entity, and its
Opportunities - Analysis of market and trends,
relative success or failure in delivering value to the
Threats - Analysis of the business environment or
customer or in creating cost efficiency.
ecosystem.
Organizations offering products and services can identify the
Preparing a SWOT analysis
If there is need for use of SWOT analysis in an organization,
strengths and weaknesses of their campaigns or products to
management may be required to analyze opportunities and
see how they can be improved. With SWOT Analysis, new
threats as well as strengths and weaknesses in the strategic
opportunities can be discovered and exploited, strengths can
position.
be identified and exploited to reduce weakness, and threats
Strengths and weaknesses are concerned with the internal
can be dealt with proactively.
capabilities and core competencies of an entity.
Interpretation of a SWOT analysis
www.waims.co.in
ENDEAVOR 2019 | WAIMS ACADMIC PRESS
75 | P a g e