SWOT Analysis Analysing the Strategic Position of a

SWOT Analysis Analysing the Strategic Position of a Business to gain competitive advantage – perhaps not with these products/names

SWOT Analysis - Concept links Competitiveness Competitive advantage PESTLE Model Benchmarking & KPIs SWOT Analysis Strategic decisions

What is SWOT Analysis? SWOT Analysis helps a business assess its competitive strength and the nature of its external environment

SWOT Analysis Overview STRENGTHS WEAKNESSES Internal to the Business OPPORTUNITIES THREATS External to the Business

Assessing Strengths & Weaknesses Competitive Advantages Role for Benchmarking Key Performance Indicators

Likely Evidence of Strengths & Weaknesses • • • Market share (%) Profitability (operating profit %) Efficiency (unit costs) Brand recognition & loyalty Market capitalisation (value & growth) Reputation for quality

Evaluating Strengths and Weaknesses • Important to focus only the most important • Is the judgement made reliable (independent)? • How sustainable are the strengths? • Can weaknesses be overcome? How?

Opportunities & Threats OPPORTUNITIES THREATS External to the Business P E S T L E

Assessing Opportunities & Threats How to take advantage of opportunities How to protect against threats Role of risk management & contingency planning

A key challenge for any business is to convert weaknesses into strengths. For example: . Weakness Possible Response Outdated technology Acquire competitor with leading technology Skills gap Invest in training & more effective recruitment Overdependence on a single product Diversify the product portfolio by entering new markets Poor quality Invest in quality assurance High fixed costs Examine potential for outsourcing or offshoring Don’t forget that for every perceived threat, the same change presents an opportunity for a business

SWOT Analysis Example – Tesco (2019) Explain one way in which the information in this SWOT analysis might influence strategic decisions by the management team at Tesco STRENGTHS • UK market leader – supermarket retailing (27% market share) • Leader in e-commerce retailing (50% share of online sales in UK) • Economies of scale • Very efficient supply chain OPPORTUNITIES • Regain lost UK market share through clearer focus on core market • Improve customer loyalty through better customer service • Emerging markets • Joint Ventures WEAKNESSES • Damaged brand reputation (unethical treatment of suppliers & accounting scandal) • Lack of clear market positioning (low cost strategy or global organization? ) THREATS • Further loss of market share to price-discounters (Aldi & Lidl) • Impact of Amazon Fresh entry into UK market • Impact of foreign global entrants • Fake Farm legal threat

Tesco has a huge market potential in the grocery industry. With strategic decision-making and effective marketing tools, Tesco can increase its revenues and compete effectively with its rivals. Here are some recommendations for Tesco: 1. Explore the emerging markets and expand its stores in Asian and African countries. 2. Perform in-depth market research and market analysis before entering a new market to avoid failure and losses. 3. Upgrade its online business and e-commerce sites to provide a pleasant shopping experience for customers. 4. Take customer feedback regarding the launches of new ads and schemes. It can prevent any potential disapproval from the public. 5. Resolve legal and financial matters including high debts, tax payments, and credit card crunches. 6. Boost its marketing and advertising activities to grab more customers than its competitors.

SWOT Analysis Example – Aldi – Use information in Teams / Files and information you have already gained Competitive Advantage to create a matrix like below STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Explain one way in which the information in this SWOT analysis might influence strategic decisions by the management team at ALDI

Explain one way in which the information in this SWOT analysis might influence strategic decisions by the management team at Aldi SWOT Analysis Example – Aldi STRENGTHS WEAKNESSES • Efficiency (labour, distribution, bags) • Limited goods • Named the best supermarket of • Customer service the year for the fourth time in 2017 • Perception of quality in The Loved By Parents Awards • Brand name OPPORTUNITIES • Continue expansion • Use of technology • Customer relationships THREATS • Being noticed by large players • Changes in fuel prices • Online shopping

How Useful is SWOT Analysis? Logical structure Too often lacks focus Focuses on strategic Independent? issues Encourages analysis of Can quickly become outexternal environment of-date

Over to you……. Watch the video and create your own SWOT analysis for AMAZON 1. https: //www. youtube. com/watch? v=ad 8 OEy. HIP 6 w 2. https: //www. youtube. com/watch? v=Za 3 FVNBn 6 Q 4 from beginning to recap and 4. 38 Competitive Advantage Explain one way in which the information in this SWOT analysis might influence strategic decisions by the management team at Amazon