Do Your SWOT Analysis, Now!

Then go right ahead, and do a SWOT

analysis for yourself and find out the strengths with which you can accept the

opportunities knocking at your door and combat threats as well.

Knowing your company's inherent qualities is always welcome and it results

in better performance. Strengths, Weaknesses, Opportunities and Threats (SWOT)

are an integral part of an organization's strategic planning process.

It is a framework that helps an organization to have a close look at the

internal and external factors influencing the organization. While the strengths

and weaknesses of an organization are linked with internal factors,

opportunities and threats are considered as external factors.

SWOT is an instrument for strategy formulation and selection. It allows

senior management to arrive at a simple 'go ahead or stop' decision based on

the info available.

It

is not limited to any particular section of organization based on its size. In

fact, SWOT analysis could be applied to any organization, right from small and

medium businesses to large corporates and conglomerates.

With IT becoming a strategic initiative, it is imperative for every IT

company to offer products and services that adds value to an organization's

business, either by contribution to revenues or by reducing operational expenses

and business risks.

Further, today, the market is flooded with a plethora of products and

services. Thus, it is imperative for any company to analyze its strengths and

weakness in each of the market segments they address.

They also have to position their products and services to differentiate

themselves from their competitors' offerings. A SWOT analysis would help an

organization to achieve its objectives.

SWOT - An analysis



A SWOT analysis can be carried out by an organization, which has a deep

understanding of its market characteristics, dynamics in terms of potential

segments, customer preferences, spend potential, competing products and their

positioning. However, to get a meaningful insight, it has to assess how its

resources and capabilities can be used as a basis for developing a competitive

advantage.

Strengths



Every organization has its own strengths and weaknesses. For example, an

organization could have a dominant market share in a geography compared to other

geographies. In the other case, one of the product lines may have a dominant

market share compared to the rest in the offering.

Kamesh Ramamoorthy

It is a matter of perspective. For instance, a company is very small and

hence has the ability to move fast. It is important to note that companies that

are in a bad position also have strengths. Whether these strengths are adequate

is an issue to be analyzed.

Weakness



Organizations may have some innate weaknesses. For example, it could be the

internal cost structure that doesn't allow it to offer products or services

below certain price points. Or it may be losing its market share to competition,

which is offering products or services at a much competitive price.

At the same time, companies that are extremely competent in what they do may

have some weaknesses. Like a dissatisfied customer base or poor reference base

of customers. How badly these weaknesses will affect the company is a matter of

analysis.

Opportunities



Identifying the unarticulated needs of the market and satiating them with a

suitable product or a solution has always been a challenge. This is what gives

an organization an edge over competition. Every firm has one opportunity or the

other to gain from. These could range from tapping into newer markets,

introducing new products or exploiting different channels of marketing.

Threats



A threat could be internal or external. Internal threat could be attrition

of talented and experienced resources or fall in productivity levels. External

threat could be in the form of mergers or takeover. Threat could also be in the

form of competition from low-priced products from local vendors interested in

short-term gains.

After SWOT



After doing a SWOT analysis, one needs to evaluate the results and try to

corroborate the findings with the customer experience and specific examples. In

case of gross mismatch of the findings with the general perception, we could try

and identify some assumptions, which were incorrect and re-do the same.

Typical human behavior would be to focus on the weaknesses and procrastinate

instead of taking decisions. Rather, it would be advantageous if one could focus

on the strengths and capitalize on them. Of course, at the same time, addressing

the weaknesses too!

Clear action points need to be arrived at and decisions taken to move forward

with specific initiatives. An organization can consolidate its position by

capitalizing on its strengths, thereby offsetting some of its weaknesses.

For example, an organization can capitalize on technology innovation or on a

satisfied reference base of customers and positioning it as a niche player for

customers who value premium services. It could also focus on rationalization and

concentrate its efforts on those product lines that contribute to the

bottom-line.

If market penetration is an issue, an organization could increase its reach

in the market by allying with established and credible partners. Potential

opportunities could be tapped by redefining the entire value chain right from

design, development and marketing of its products thereby optimizing the TCO to

the customer.

Tips on SWOT



A judicious balance is required as regards the details of information

collated (detail versus perception). There might be cases of overload of

information in some cases, while in others there might be extreme paucity of

information.

Just focus on what is required to arrive at a 'go-no go' decision. The

purpose is to allow you to take an informed decision and not to validate every

piece of data/information available. The SWOT analysis is valid for the current

period only.

Kamesh Ramamoorthy is Executive Vice President (Enterprise Solutions) at

Ramco Systems