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 assignments. 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 top 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.

SWOT-Analysis

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. It means businesses can only react to opportunities and threats and they do not have any means to influence opportunities and threats.

Internal Strengths: attributes, characteristics and factors that give competitive advantage to the business.

For 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.

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 for major weaknesses that a company may have.

External Opportunities: favorable situations and factors that can strengthen competitive advantage of the business or provide the business with new sources of competitive advantage.

The list of major opportunities for a business may include new product development, finding new customer segments for existing products, opportunities for further cost reductions thanks to creativity and technological innovations and others.

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.

As a strategic analytical tool, SWOT analysis has some weaknesses as well. Specifically, the application of this tool may encourage users to focus on quantity of factors, instead of focusing on a few, but the most powerful factors having the biggest impact on the business. In other words, SWOT analysis lacks guidance and provision in terms of differences in importance between factors. As a result weak strengths may appear to balance strong weaknesses.

How to do SWOT analysis

The majority of sources explaining SWOT analysis assume that their audience is businesses aiming to improve their operational efficiency. This SWOT analysis resource is different. It 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 with the following four steps:

Step 1: Selecting a 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 own 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 provide students the flexibility to conduct SWOT analysis of a company of their own 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, 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.

You can determine strengths of businesses in answers to the following questions:

  • What advantages does the company have?
  • What does the company better than its competitors?
  • What unique or low-cost resources are available to the company that are not available to its rivals?
  • What Unique Selling Propositions (UPS) are associated with the company?

The following table illustrates the major strengths possessed by businesses 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 products and services Mention this point if the company follows differentiation business strategy
Brand value of the business Mention and discuss specific figure by referring to reliable source such as Forbes The Most Valuable Brands
Solid financial position Mention the amount of revenues and profits generated by the business during the last financial year. Reference the interviewee (in case of small and medium businesses) or annual report (in case multinational businesses)
Focused brand portfolio Discuss the point of focus of the brand. For example, PepsiCo has a large brand portfolio that focuses on drinks and snacks only
First mover advantage Discuss the benefits of first mover advantage for the business
Leadership position in the market Mention and discuss the market share of the company in the local or global marketplace
Access to unique resources Discuss specific resources and their importance in terms of gaining competitive advantage
High level of consumer loyalty If possible, mention statistical data such as the number of consumers, the percentage of repeat purchases etc. by referring to reliable sources
Efficient leadership by a charismatic CEO Briefly discuss specific achievements and personal qualities of the CEO
Benefits from the economies of scale Use statistical data from reliable sources to illustrate the extent of benefits derived from the economies of scale
Strong patent portfolio Mention the most important innovations made by the company and respective patents the company possesses
Positive reputation for conducting ethical business Briefly mention specific CSR policies, programs and initiatives that earned the company reputation as an ethical business
Organizational culture based on innovation and creativity Discuss important aspects of organizational culture and ways in which these aspects increase competitiveness of the business
Convenient location of the business Discuss the patterns of location of the business and its importance
Presence of strong ecosystem of products and services Strong ecosystem can be a considerable strength for the business, encouraging customers to purchase more products and services.

For example, Google runs Blogger that can be monetized with Google AdSense, the contents of the blog can be promoted via Google AdWords and content files can be stored in Google Drive

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 brand’s weakness you can discuss in you SWOT analysis.

All arguments and numbers need to be referenced using referencing style required by your educational institution in an appropriate manner. Preference has to be given to online journals and magazines over online discussion forums and personal blogs.

Answers to the following questions can help to identify weaknesses of your case study company:

  • What aspects of the business could the company improve?
  • What should the company avoid?
  • What factors are causing the company to lose sales?
  • What aspects of products/services are customers are likely to see as weaknesses?

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

Weaknesses Tips/Notes
Weak or unsustainable competitive advantage Mainly relates to companies pursuing cost leadership business strategy. Discuss the nature of competitive advantage and explain why it is unsustainable
High cost of products or services Mainly relates to companies pursuing differentiation business strategy
Damage to brand image by CSR-related incidents Refer to specific incidents mentioning relevant statistical data and do not forget to reference the data
Extensive dependence on a few suppliers Name the suppliers and the type of resources supplied by them and discuss the bargaining power of suppliers
Presence of huge debts Specify the amount of debts in numbers and reference to a reliable source
Ineffective cost structure Discuss specific inefficiencies of company’s cost structure and their negative implications for the business
Unfocused product portfolio Discuss the categories of company’s product portfolio, illustrating the lack of focus and its implications for the business
Gaps in capabilities of the company Refer to specific gaps such as a lack of new product development capabilities, absence of online sales channel and others.

Example: Absence of own operating system and software for Samsung

Low employee morale and commitment Specify the main reasons for low employee morale and commitment such as low wages and autocratic management style and discuss their negative implications for the business
History of product recalls Refer to specific product names and models, mention dates and numbers, recalled discuss the damage of the incident to the brand image
Difficulties with the access to distribution channels Explain the nature of difficulties, their causes and implications
Business model can be easily replicated by competitors Discuss the weakness of competitive advantage and its vulnerability for replication by competitors
High employee turnover Discuss the reasons for high employee turnover and its negative implications for the business for short-term and long-term perspectives
Weak presence in emerging markets This can be a notable weakness for multinational brands taking into account market saturation in developed countries
Seasonality of the business Seasonality of the business causes fluctuations of the need for the workforce over the course of the year. This may increase employee training and development and other costs.

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 weaknesses. If you can’t 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. Interesting trends in the industry can also be opportunities for the business.

Opportunities can be identified through answering the following questions:

  • What are interesting trends in the market that can be profitably explored by the company?
  • What are the demographic and social changes that present new opportunities in the industry?
  • Are there any government policies and regulations that can help the industry?
  • Are there any opportunities for the company related to technological developments?

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 cost reductions This can be achieved thanks to creativity and innovations and other measures
New product development by increasing R&D spending Refer to new product categories and specific products. Justify your argument by discussing the demand for them.
International market expansion with the focus on emerging economies Discuss the ways in which establishing presence or increasing presence in emerging economies such as China and India is going to benefit the company in long-term perspective
Finding and exploiting new sources of competitive advantage Be specific in highlighting new potential sources of competitive advantage taking into account industry-specific and company-specific factors
Increasing the effectiveness of social media marketing Refer to contemporary social media marketing practices that are not currently utilized by the company and discuss potential benefits of their utilization
Engaging in mergers and acquisitions Discuss potential target companies for mergers and acquisitions and explain potential benefits
Formation of strategic alliances Explain target companies for strategic alliances, discuss the nature of alliances and potential benefits
Finding new customer segments Specify the potential customer segments by referring to geographic, demographic, behavioural and psychographic bases of segmentation
Increasing operational effectiveness via investing in technology Discuss specific types of technologies that can contribute to the operational effectiveness of the business
Emergence of competitor vulnerabilities Explain specific types of competitor vulnerabilities and ways in which they can benefit the case study company
Focus on CSR programs and initiatives Increasing CSR budget and focusing on ethical aspect of the business may improve the brand image of a 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.

You can identify the main threats to the business through answering the following questions:

  • What are the main obstacles faced by the company?
  • What are the latest developments in competitor Unique Selling Propositions?
  • Does the company have substantial amount of bad debts or cash-flow problems?
  • Was the company involved in any scandal recently?

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 service due to the further pursuit of cost reduction This threat relates to businesses pursuing cost leadership business strategy. Refer to the latest cost reduction initiatives introduced by the company
Emergence of new competitors with access to cheaper resources Mention resources critical to the business and explain how competitors can potentially acquire these resources for less prices
Emergence of substitute products and services Refer to specific substitute products and services and discuss the level of their threat to company’s existing product portfolio
Increase in the rate of inflation Discuss the potential negative effects of inflation on the volume of revenues by referring to the present and past rates of inflation
Changes in consumer tastes and preferences Explain in which ways customer preferences may change by referring to social dynamics  and discuss the negative implications of these changes to the business
Changes in currency exchange rate Strengthening home country currency decreases the amount of reported profits from international sales. Illustrate this for the company of your choice by referring to specific numbers from official sources
Increase in the prices of raw resources Mention the most critical resources for the business and illustrate how increase of their prices decreases the amount of profits
Introduction of trade barriers Refer to major international markets for the company and illustrate potential negative implications for the business, if trade barriers are 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 other lawsuits against the company Refer to previous patent infringement incidents the company was involved (if were are any) and discuss relevant risks in the future
Loss of key members of workforce Refer to key members of the company, their contribution to company’s success and potential negative implications of their departure from the business.
Emergence of CSR-related scandals Refer to past CSR scandals faced by the company and discuss the risks of future scandals and their implications
Natural disasters Natural disasters such as earthquakes and flooding are generic threats for all businesses. You can discuss this point when you have already discussed all other threats, but still didn’t reach the required wordcount
Risk of a financial crisis Another generic threat that can be applied towards many businesses pursuing differentiation business strategy
Weakening of industry entry barriers for new competitors Innovative nature of products and services offered by new competitors or their innovative business model may reduce the significance and relevance of industry entry barriers
Risk of a new economic crisis A global economic crisis similar to the economic crisis of 2007-2008 can have a detrimental impact on the business

Step 3: Writing

You can structure your writing of SWOT analysis 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, develop a SWOT Analysis Matrix for your chosen company. 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. These should be precise and verifiable statements.

Using steps 1 and 2 above, you should have long list of factors related to strengths, weaknesses, opportunities and threats for the business. Now it is time to prioritize factors to be included in your SWOT analysis by focusing on the most significant factors. The numbers of factors that should be discussed under each category depends on the total word-count for your assignment.

Thirdly, you have to discuss bullet points in your SWOT table. Your analysis needs to contain statistical data and ideally graphs and tables as well. Do not forget to reference sources, using referencing system  required by your university. Moreover, you can discuss how to address weaknesses and threats identified as a result of your SWOT analysis and get additional marks for your work.

 

SWOT Analysis Example

This portal contains example SWOT analysis of the following companies:

  1. Alphabet Inc. (Google) 
  2. Amazon.com Inc. 
  3. Apple Inc. 
  4. BMW Group 
  5. British Airways 
  6. Caffe Nero 
  7. Coca Cola Company 
  8. Dell Inc. 
  9. eBay Inc. 
  10. Facebook Inc.
  11. Gap Inc. 
  12. GlaxoSmithKline 
  13. Guest-Tek 
  14. Hilton Worldwide Holdings Inc.
  15. Jamie’s Italian Sydney 
  16. John Lewis 
  17. IKEA Group 
  18. Longleat Safari Park 
  19. Marks & Spencer 
  20. McDonald’s Corporation 
  21. Microsoft Corporation 
  22. Oracle Corporation 
  23. PepsiCo Inc. 
  24. Red Bull GmbH 
  25. Samsung Electronics 
  26. Sharp 
  27. Skanska 
  28. Starbucks Corporation 
  29. Tesco PLC 
  30. Tesla Inc.
  31. Thorpe Park 
  32. Toyota Motor Corporation 
  33. Uber Technologies Inc.
  34. Vodafone 
  35. Wal-Mart Stores Inc. 
  36. Warner Bros. Entertainment Inc. 
  37. Xiaomi Inc.

SWOT Analysis Template

Please choose an industry and a company below to generate a SWOT table containing bullet points of strengths, weaknesses, opportunities and threats of your chosen company. In order to complete the SWOT analysis you will need to expand the bullet points into a couple of paragraphs with discussions and references from reliable sources to support your arguments.