Power of
SWOT
Introduction
¡ SWOT Analysis is a strategic
planning tool used to evaluate
the:
¡ Strengths,
¡ Weaknesses,
¡ Opportunities,
¡ Threats
History of SWOT Analysis
¡ early 1950s
¡ Developed at Stanford
¡ Funded by Fortune 500
companies
¡ Took 9 years to develop
¡ Involved 5000
interviews
SWOT Analysis
SWOT analysis is the first stage of planning and helps marketers to
focus on key issues.
S
internal SWOT factors
O
W
external SWOT factors
Turn weaknesses into strengths,
threats into opportunities.
Then finally, SWOT will give
managers options to match
internal strengths with external
opportunities.
T
SWOT Analysis
The main purpose of SWOT analysis has to be to add value to our products and services so
that we can recruit new customers, retain loyal customers, and extend products and
services to customer segments over the long-term.
SWOT Analysis
Simple rules for successful SWOT analysis.
•  Be realistic about the strengths and weaknesses of your
organization when conducting SWOT analysis.
•  SWOT analysis should distinguish between where your
organization is today, and where it could be in the future.
•  SWOT should always be specific. Avoid grey areas.
•  Always apply SWOT in relation to your competition i.e. better
than or worse than your competition.
•  Keep your SWOT short and simple. Avoid complexity and over
analysis
Creative Use of SWOTs
¡  How can we Use each Strength?
¡  How can we Stop each Weakness?
¡  How can we use each Opportunity?
¡  How can we Defend against each Threat?
Matching strengths to opportunities
Otherwise known as:
S-O or Maxi-Maxi
strategy
Using a strength to
maximise an opportunity
Matching weakness to opportunities
Otherwise known as: W-­‐O or Mini-­‐Maxi strategy Improving capability to maximise an opportunity Matching strengths to threats
Otherwise known as: S-­‐T or Maxi-­‐Mini strategy Minimising a threat with a strength Matching weakness to threats
Otherwise known as: W-­‐T or Mini-­‐Mini strategy Minimising weaknesses and threats at same @me (oBen last choice) POWER your SWOT
E = Emphasize detail.
Detail, reasoning and justification are
often omitted from the SWOT analysis.
What one tends to find is that the
analysis contains lists of single words.
POWER your SWOT
W = Weighting.
Too often elements of a SWOT analysis
are not weighted. Naturally some
points will be more controversial than
others. So weight the factors. One way
would be to use percentages e.g.
Threat A = 10%, Threat B = 70%, and
Threat C = 20% (they total 100%).
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POWER your SWOT
R = Rank and prioritize.
Once detail has been added, and
factors have been reviewed for
weighting, you can then progress to
give the SWOT analysis some strategic
meaning i.e. you can begin to select
those factors that will most greatly
influence your marketing strategy
albeit a mix of strengths, weaknesses,
opportunities and threats.
POWER your SWOT
P = Personal experience.
How do you the marketing manger fit
in relation with the SWOT analysis? You
bring your experiences, skills,
knowledge, attitudes and beliefs to the
audit. Your perception or simple gut
feeling will impact the SWOT.
POWER your SWOT
O = Order – strengths or weaknesses,
opportunities or threats.
Often marketing managers will
inadvertently reverse opportunities and
strengths, and threats and weaknesses.
This is because the line between
internal strengths and weaknesses, and
external opportunities and threats is
sometimes difficult to spot. For
example, in relation to global warming
and climate change, one could
mistake environmentalism as a threat
rather than a potential opportunity.
Strategic Model
What we want to be
Why we exist
Vision
Mission
What we believe in
Values
our game plan
Strategy
What we need to do
Implementation & Focus
What I need to do
Strategic Initiatives
Everything Balanced
Personal Objectives
Strategic Outcomes
How do we
develop our
Strategy!
A strength can be a competitive
advantage like…
u Believe in yourself u Posi@ve AHtude u Focus u Intelligence u Ability to learn u Time Management u Sense of Responsibility u Specific Goals u Passion & Determina@on u Cri@cal Thinking Ability u Suppor@ng Environment u Etc A weakness can be a disadvantage
as…
u  Procras@na@on u  Poor Time Management u  Non-­‐suppor@ve Environment u  Irresponsible u  Unrecognized Ins@tu@on u  Complex Goals u  Etc An opportunity can be…
v Good Ins@tu@on v Scholarships v Good Mentor v Internships v Jobs v Backups v Etc A threat can be…
v Hurdles v Health Problems v No Jobs v Discouragement v Bad Environment v May be friends v etc Analysis
-Example-
Analysis PepsiCo
Analysis PepsiCo
Analysis PepsiCo
Strengths
Branding – One of PepsiCo’s top brands is of course Pepsi, one of the most
recognized brands of the world,
Ranking - ranked according to Interbrand. As of 2008 it ranked 26th amongst
top 100 global brands.
Profit - Pepsi generates more than $15,000 million of annual sales.
Others - Pepsi is joined in broad recognition by such PepsiCo brands as Diet
Pepsi, Gatorade Mountain Dew, Thirst Quencher, Lay’s Potato Chips, Lipton
Teas (PepsiCo/Unilever Partnership), Tropicana Beverages, Fritos Corn, Tostitos
Tortilla Chips, Doritos Tortilla Chips, Aquafina Bottled Water, Cheetos Cheese
Flavored Snacks, Quaker Foods and Snacks, Ruffles Potato Chips, Mirinda,
Tostitos Tortilla Chips, and Sierra Mist.
Analysis PepsiCo
Weaknesses
Overdependence on Wal-Mart – Sales to Wal-Mart represent approximately 12% of
PepsiCo’s total net revenue. Wal-Mart is PepsiCo’s largest customer. As a result
PepsiCo’s fortunes are influenced by the business strategy of Wal-Mart specifically its
emphasis on private-label sales which produce a higher profit margin than national
brands. Wal-Mart’s low price themes put pressure on PepsiCo to hold down prices.
Overdependence on US Markets – Despite its international presence, 52% of its
revenues originate in the US. This concentration does leave PepsiCo somewhat
vulnerable to the impact of changing economic conditions, and labor strikes. Large
US customers could exploit PepsiCo’s lack of bargaining power and negatively
impact its revenues.
Low Productivity – In 2008 PepsiCo had approximately 198,000 employees. Its
revenue per employee was $219,439, which was lower that its competitors. This may
indicate comparatively low productivity on the part of PepsiCo employees.
Image Damage Due to Product Recall – Recently (2008) salmonella contamination
forced PepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. This
followed incidents of exploding Diet Pepsi cans in 2007. Such occurrences damage
company image and reduce consumer confidence in PepsiCo products.
Analysis PepsiCo
Opportunities
Broadening of Product Base – PepsiCo is seeking to address one of its potential
weaknesses; dependency on US markets by acquiring Russia’s leading Juice Company,
Lebedyansky, and V Wwater in the United Kingdom. It continues to broaden its product
base by introducing TrueNorth Nut Snacks and increasing its Lipton Tea venture with
Unilever. These recent initiatives will enable PepsiCo to adjust to the changing lifestyles of
its consumers.
International Expansion – PepsiCo is in the midst of making a $1, 000 million investment in
China, and a $500 million investment in India. Both initiatives are part of its expansion into
international markets and a lessening of its dependence on US sales. In addition the
company plans on major capital initiatives in Brazil and Mexico.
Growing Savory Snack and Bottled Water market in US – PepsiCo is positioned well to
capitalize on the growing bottle water market which is projected to be worth over $24
million by 2012. Products such as Aquafina, and Propel are well established products and
in a position to ride the upward crest.PepsiCo products such as, Doritos tortilla chips,
Cheetos cheese flavored snacks, Tostitos tortilla chips, Fritos corn chips, Ruffles potato
chips, Sun Chips multigrain snacks, Rold Gold pretzels, Santitas are also benefiting from a
growing savory snack market which is projected to grow as much as 27% by 2013,
representing an increase of $28 million.
Analysis PepsiCo
Threats
Decline in Carbonated Drink Sales – Soft drink sales are projected to decline by as
much as 2.7% by 2012, down $ 63,459 million in value. PepsiCo is in the process of
diversification, but is likely to feel the impact of the projected decline.
Potential Negative Impact of Government Regulations – It is anticipated that
government initiatives related to environmental, health and safety may have the
potential to negatively impact PepsiCo. For example, manufacturing, marketing,
and distribution of food products may be altered as a result of state, federal or local
dictates. Preliminary studies on acrylamide seem to suggest that it may cause
cancer in laboratory animals when consumed in significant amounts. If the
company has to comply with a related regulation and add warning labels or place
warnings in certain locations where its products are sold, a negative impact may
result for PepsiCo.
Intense Competition – The Coca-Cola Company is PepsiCo’s primary competitors.
But others include Nestlé, Groupe Danone and Kraft Foods. Intense competition
may influence pricing, advertising, sales promotion initiatives undertaken by
PepsiCo. Resently Coca-Cola passed PepsiCo in Juice sales.
Analysis PepsiCo
Threats
Potential Disruption Due to Labor Unrest – Based upon recent history, PepsiCo may
be vulnerable to strikes and other labor disputes. In 2008 a strike in India shut down
production for nearly an entire month. This disrupted both manufacturing and
distribution.
PepsiCo is a world leader in convenient snacks, foods and beverages with revenues
of more than $43 billion and over 198,000 employees. Take a journey through our
past and see the key milestones that define PepsiCo.
Diversification – PepsiCo’s diversification is obvious in that the fact that each of its
top 18 brands generates annual sales of over $1,000 million. PepsiCo’s arsenal also
includes ready-to-drink teas, juice drinks, bottled water, as well as breakfast cereals,
cakes and cake mixes.This broad product base plus a multi-channel distribution
system serve to help insulate PepsiCo from shifting business climates.
Distribution – The company delivers its products directly from manufacturing plants
and warehouses to customer warehouses and retail stores. This is part of a three
pronged approach which also includes employees making direct store deliveries of
snacks and beverages and the use of third party distribution services