1. Becomes a sterile academic exercise of classifying data and information
2. Allows firms to create lists without serious consideration of the issues.
Internal segments of SWOT
External segments of SWOT
Questions that should be asked in order to identify the most critical issues affecting a company
1. What do customers (and noncustomers) believe about us as a company
2. What do customers (and noncustomers) think of our product quality, customer service, price and overall value, convenience, and promotional messages in comparison to our competitors?
3. Which of our weaknesses translate into a decreased ability to serve customers (and decreased ability to convert noncustomers)?
4. How do trends in the external environment affect customers (and noncustomers)?
5. What is the relative importance of these issues, not as we see them but as customers see them?
Types of Resources
Four issues to be aware of when applying a SWOT test successfully
1. Assessment of strengths and weaknesses must look beyond the firm�s resources and product offerings to examine processes that are key to meeting customers� needs. This often entails offering �solutions� to customer�s problems rather than specific products.
2. Achievement of the firm�s goals and objectives depends on its ability to create capabilities by matching its strengths with market opportunities
3. Firms can often convert weaknesses into strengths or even capabilities by investing strategically in key areas.
4. Weaknesses that cannot be converted into strengths become the firms limitations
What two elements of the SWOT Matrix should be matched?
Strengths and opportunities
What elements of the SWOT Matrix should be converted to another?
Weaknesses to strengths
Threats to opportunities
What two elements of the SWOT Matrix should be minimized and avoided?
Weakness and threats
Quantitative Assessment of the SWOT Matrix
I=Importance of the element (1 low to 3 high) (critical to business model)
M= Magnitude of the element (1 low to 3 high) (potential impact)
R= total Rating of the element
Rating either 1 to 3 or -1 to -3
Three basic strategies for developing capabilities and competitive advantages
1. Operational excellence
2. Product leadership
3. Customer intimacy
Four general directions for its strategic efforts
1. Aggressive ( many internal strengths/many external opportunities)