Marketing offers numerous valuable tools to analyze a company’s current situation. Though, most of them have the weakness of providing only a very isolated view that is not suitable for a long-term entrepreneurial decision. The SWOT analysis, however, pursues an integrated approach including key company and environmental variables. The objective is the confrontation of the company’s internal strengths and its weaknesses as well as company-external business opportunities and risks in order to generate possible strategic options.
The SWOT analysis particularly supports a combined and integrated approach of the current company situation enabling well-balanced and comprehensive decisions. One main benefit is thus the reduction of complexity through the integrated approach, leaving the key factors and strategies as analytical residue.
In practice, the SWOT method is a well established tool to analyze business units in larger companies and smaller start-ups in particular during their launch.
The SWOT analysis though reveals limited possibilities when analyzing all business units of large companies. For this task other, more holistic, approaches as the share-holder-value concept or the portfolio analysis are appropriate. However, this large field of tools will not be treated in this assignment. The SWOT analysis is though, despite its disadvantages, one of the most important instruments for the internal analysis of a company’s situation that - in every case - delivers a pretty comprehensive and resilient foundation for further entrepreneurial decisions and strategic planning.
Tables of Content
Executive Summary
List of Figures
List of Abbreviations
1 Introduction
2 Theoretical foundations of the SWOT Analysis
2.1 Area specific Analysis
2.1.1 Potential Analysis
2.1.2 Competitor Analysis
2.1.3 Market Analysis
2.1.4 Environmental Analysis
2.2 Integrated Analysis
2.2.1 Analysis of Strengths and Weaknesses
2.2.2 Analysis of Opportunities and Threats
2.3 Deduction of Strategies
3 Review
Bibliography
Executive Summary
Marketing offers numerous valuable tools to analyze a company’s current situation. Though, most of them have the weakness of providing only a very isolated view that is not suitable for a long-term entrepreneurial decision. The SWOT analysis, however, pursues an integrated approach including key company and environmental variables. The objective is the confrontation of the company’s internal strengths and its weaknesses as well as company-external business opportunities and risks in order to generate possible strategic options.
The SWOT analysis particularly supports a combined and integrated approach of the current company situation enabling well-balanced and comprehensive decisions. One main benefit is thus the reduction of complexity through the integrated approach, leaving the key factors and strategies as analytical residue.
In practice, the SWOT method is a well established tool to analyze business units in larger companies and smaller start-ups in particular during their launch.
The SWOT analysis though reveals limited possibilities when analyzing all business units of large companies. For this task other, more holistic, approaches as the share-holder-value concept or the portfolio analysis are appropriate. However, this large field of tools will not be treated in this assignment. The SWOT analysis is though, despite its disadvantages, one of the most important instruments for the internal analysis of a company’s situation that - in every case - delivers a pretty comprehensive and resilient foundation for further entrepreneurial decisions and strategic planning.
List of Figures
Figure 1: System of Strategic Analysis
Figure 2: The SWOT Matrix
Figure 3: Different Types of Strategies within a SWOT Analysis
List of Abbreviations
illustration not visible in this excerpt
1 Introduction
When a company is in a certain maybe critical market situation it needs tools to analyze its current situation and find the right strategy for successful development. But how can a company define where it is coming from? Where does the company want to go to? Which strengths helped the company to develop successfully from past to present? Which weaknesses exist in the company and which of them have to be neutralized or might even have to be changed into strengths? Regarding the market: Which opportunities and threats can be expected? All these questions must be answered in a structured, analytical and integrated way. Therefore marketing can offer the instrument of the SWOT analysis.
The SWOT analysis pursues an integrated approach including key company and environmental variables. The objective is the confrontation of the company’s internal strengths and its weaknesses as well as company-external business opportunities and threats in order to generate possible strategic options.
The assignment’s objective is to describe the method of SWOT analysis as a comprehensive, internal analysis instrument to process company internal and external information, able to deliver a significant added value to a company’s strategic development. Moreover, derivable market strategies from the SWOT method shall be illustrated. This paper will furthermore analyze the strengths and weaknesses of the SWOT analysis it self, too.
2 Theoretical foundations of the SWOT Analysis
Examining a company’s internal and external environment is essential in the process of strategic planning. The SWOT analysis, which includes the analysis of strengths, weaknesses, opportunities and threats investigates both, internal and external as well as positive and negative factors of a corporation. On the basis of the SWOT analysis a marketing strategy can be developed using corporate strengths as well as avoiding corporate weaknesses to enable a company to benefit from future opportunities with regard of future risks (Nieschlag et al. 2002, p. 104; Scheuch 2007, p. 184).
Within the SWOT analysis, broad information from the company, competitors, market and environment can be gathered using potential analysis, competitor analysis, market analysis and environmental analysis. This information is then presented and compacted within the analysis of strengths and weaknesses as well as opportunities and threats as seen in Figure 1. Therefore, the SWOT analysis offers a combination of these results by delivering helpful information to see the firm’s resources and capacities against the background of the competitive environment in which it operates. As a result, on the basis of this SWOT analysis, generic strategies can be deducted (Nieschlag et al. 2002, p. 103).
illustration not visible in this excerpt
Figure 1: System of Strategic Analysis
(Adapted from Nieschlag et al. 2002, p. 103).
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