SWOT Analysis

Summary

SWOT analysis is concerned with determining the position of a business vis-a-vis its competitors. It
is a widely accepted way of performing such an analysis, although, of course, other methods can
produce similar (or better) results. SWOT links the knowledge of the present bases of competition
with market scenarios. The result of a SWOT analysis is a SWOT table, which is a concise statement
of the situation in which the firm finds itself.

The characteristics of a ‘Strengths, Weaknesses, Opportunities and Threats’ table and the
associated analysis are first described and the difficulties in carrying out a formal analysis are
explored. The relatively easy task of building a SWOT table for the short term is described. Then a
five-step approach to the much more difficult task of building a SWOT table for the longer term is
outlined. This outline is followed by an extended example in which each step in the approach is
discussed in depth. Finally, the relative emphases to be placed on internal and external factors are
considered briefly, and sensitivity analysis is broached.

Many leader-managers find it useful to encapsulate the position of their organisation in a concise
statement of its strengths and weaknesses vis-a-vis the competition and the opportunities and
threats that it faces in its environment. They do this by constructing a SWOT table. A SWOT table
provides a useful springboard for the identification of strategy, since it identifies the weaknesses
that need to be strengthened, the strengths that can be used for competitive advantage, the
opportunities that can be used to the organisation's advantage, and the threats that it needs to
guard against.

1. SWOT Analysis and its Difficulties

1.1 What is a SWOT analysis?

In earlier discussions, the remote and operating environments of a business were considered.
Together these analyses were used to produce pictures of the future - scenarios. Furthermore, the
bases of competition were examined to identify where sources of competitive advantage would lie.
Together they provide the information necessary to assess organisational position. Prior to thinking
about formulating strategy, it can be useful to bring this information together to provide a
summarised view of where a business stands. A useful form of this concise view is a SWOT table, a
table setting out the business's Strengths and Weaknesses and the Opportunities and Threats that
it faces. An example of a SWOT table for a no-frills airline is given in the following Exhibit 1.

It is very common in practice to begin the process of formulating strategy by asking the participants
in a rather informal way to draw up a SWOT table for their organisation through what is termed a
SWOT analysis. Such a process can be valuable in getting the participants quickly and fully engaged
in strategy formulation. However, this informality produces a strong tendency to consider only the
present and short- term future by focusing on the present critical offer features and the present
significant operating factors. This is what has occurred in Exhibit 1, which is a SWOT table
applicable to the short term and derived from thinking about the short term. A short-term SWOT
has its uses, but what is obligatory for longer-term strategy formulation is a SWOT table that
focuses on the longer term - on the future significant operating factors and the strategic resources
that the firm will need.

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 Exhibit 1: SWOT table for a No-Frills Airline

1.2 The problem in identifying strengths and weaknesses

A competitive analysis provides the basis for a comparison of the businesses in the competitive
arena. It isn't a straightforward matter to determine what is strength and what is a weakness in
such a comparison, however, since any assessment must be made bearing in mind the
organisational environment. Suppose a business takes the view that incorporating additional IT
functionality into its products is needed, and it has £200,000 that it can allocate to building up its
expertise in this area. Is this £200,000 a strength? It is, if competitors have a lesser amount and if
the extra that the business has can make a significant difference. On the other hand, it's a
weakness if competitors are willing to spend more and this larger spend can bring much greater
functionality. This example illustrates that any strength must be judged vis-a-vis the competitors in
the context of the environment. To quote Collis and Montgomery: 'The greatest mistake managers
make when evaluating their resources is failing to assess them relative to competitors.'

1.3 The problem in identifying opportunities and threats

The external environment is the source of the opportunities and threats facing the business, with
scenarios encapsulating the environmental issues. In all the chapters so far, events and trends in
the environment have been termed issues rather than opportunities or threats. This has been
deliberate, since it's not possible to determine whether an issue is an opportunity or a threat until
a full picture of the business's situation has emerged. Consider the following issue: the UK
government decides to give less financial support to undergraduates. Is this a threat or an
opportunity to a particular university? It's likely to be a threat to a university that isn't located close
to a conurbation {attractive to students who wish to save money by living at home or who hope to
find part-time work) or one that isn't seriously engaged in distance learning. On the other hand, it's
an opportunity {or perhaps only a lesser threat) for those that are. This small example illustrates
that whether an issue is a threat or an opportunity depends on the relative strengths of the
competing businesses.

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1.4 Critical offer features, significant operating factors and strategic resources

It is relatively easy to construct a SWOT table for the near future driven by the present critical offer
features and the present significant operating factors; it's much harder to construct one that
focuses on the truly strategic and the longer term.

Exhibit 2 illustrates the important point that it's the future significant operating factors that need
to be focused on, mainly because these are the part of the future that can sensibly be considered.
The future critical offer features can't be known with any certainty and to use them could be very
misleading. Thus, although knowledge of the present and future critical offer features does play a
part in determining strategic position, it's the significant operating facto - and the strategic
resources needed to operate effectively in the future that are of paramount concern.

Exhibit 2: Critical Offer Features, Significant Operating Factors & Strategic Resources

The interdependence of the SWOT elements - for example, what is a strength depends on the
environmental context as well as on the relative standing of competitors - means that it's not really
possible to provide a set of mechanical procedures to cover all aspects of producing a SWOT table.
However, it is possible to mechanise several of the individual steps. Whether a mechanised path is
followed or not, a pattern of thinking can be identified that will enable the important elements of
the SWOT table to be identified. Like so many techniques in strategic management, the importance
is not the SWOT table itself but the understanding that should be obtained by the process of
building it. Throughout the building of the SWOT table, management judgement is of
overwhelming importance.

In the main, Strengths, Weaknesses, Opportunities and Threats analysis derives from more
detailed analyses. A comparison with competitors unearths the strengths; and weaknesses. The
(external) environment is the source of opportunities and threats. The concern in developing a
SWOT table for the short-term future is likely to be the present critical offer features and
significant operating factors. The concern in developing a SWOT table for the longer term is the
future significant operating factors and the strategic resources needed to operate successfully in
the future.

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2. An approach to building a short-term SWOT table

The process of building a short-term SWOT table involves the identification of present competitors,
critical offer features and significant operating factors. Identifying the present competitors
stimulates the identification of the present critical offer features and significant operating factors,
and the present strategic resources, since they can be found through answering the question 'Why
are the successful competitors successful?'

2.1 Step 1 - Identifying present competitors

It is relatively easy to determine present competitors: they are the businesses that are in the same
competitive group as the target business for which the SWOT analysis is being carried out.
However, it is especially important to identify key competitors. One way of determining the key
competitors for a business is to generate the following lists:
 List the businesses with closely similar offers.
 List the businesses that serve closely similar customer needs.
 List the businesses with a similar geographical scope.
 List, in order of market share, those businesses with higher market share than the target
business.

It has been suggested that key competitors will be those that appear in the top three of anyone list
and those that appear on more than one list. .

2.2 Step 2 - Identifying present critical offer features

Managers knowledgeable about the markets will be those whose experience would be used to
identify the critical offer features. It may be that a large number of offer features are identified
initially, but to focus debate there is a need to restrict the list only to those that are critical, i.e.
those that have a significant effect on sales success. They are likely to include order-winning
features.

2.3 Step 3 - Identifying present significant operating factors

The significant operating factors are those characteristics of the operating environment where all
successful businesses must have strong positions. Significant operating factors will have been
detected in an operating environmental analysis of the sort discussed, as the significant forces in
the competitive arena will have been identified. However, it should be realised that it's the relative
endowments of businesses in the competitive arena, rather than the average position, that are
significant in determining the significant operating factors. If all competitors are equally endowed,
a significant force isn't a significant operating factor, since it doesn't differentiate between
competitors.

2.4 Step 4 - Identifying the present strategic resources

The present strategic resources will be assessed in relation to competitors and in the light of the
significant operating factors. For example, if a significant operating factor for a watch maker was
the constant addition of many additional features, then styling and/or skills in electronics might be
called for.

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2.5 Step 5 - Identifying the present issues

The present issues are those that have to be reacted to fairly immediately to support the firm's
operations in the short term. They will be identified through forecasting and a knowledge of likely
future events. Management judgement would be used to decide which features of the firm are
strengths and weaknesses and which issues are opportunities and which are threats, and thus to
create a SWOT table in the form shown in Exhibit 1.

3. An approach to building a longer-term SWOT Table

The rest of this lecture will focus on building a SWOT table suitable for the longer term. It will thus
focus on future significant operating factors and the firm's strategic resources rather than the
critical offer features. To support the building of a longer- term SWOT table, the five-step process
indicated in Exhibit 3 is suggested. Step 1 is similar to that in the development of a short-term
SWOT table. In step 2, the future significant operating factors are identified by taking into account
the changes that the strategic issues will cause to the significant operating factors. In step 3, the
strategic resources that will be needed in the future are identified through the interplay of present
strategic resources and future significant operating factors. In step 4, the strategic resources are
split into strengths and weaknesses by comparing the firm's strategic resources with those of
future competitors. In the light of these strengths and weaknesses, the issues can be separated
into opportunities and threats (step 5). There is likely to be some iteration in steps 4 and 5.

Exhibit 3: Steps to building a longer-term SWOT table

3.1 Step 1 - Determining the present situation

As with developing a short-term SWOT table, the present significant operating factors and the
present competitors will have been identified. This will be used in steps 2 and 4, respectively.

3.2 Step 2 - Determining the future significant operating factors

The future significant operating factors will be determined through the interplay between the
present significant operating factors and the strategic issues. For example, until towards the end of
the 1980s, very large power stations had been favoured by the one large UK electricity generator -
the Central Electricity Generating Board (CEGB). A firm such as International Combustion of Derby
was one of the few companies that could manufacture the massive boilers necessary for these
stations. Then the situation changed drastically. The CEGB was broken up and privatised, and
technological and social changes favoured the much smaller, locally sited combined heat and
power stations. The significant operating factors had changed and the strategic resources of
International Combustion were strategic no more, as very large boilers were no longer required.

3.3 Step 3 - Determining the future strategic resource needs

Determination of the future strategic resources needed to compete effectively in the competitive
arena of the future is the nub of a SWOT analysis for the longer term. Three further examples will

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illustrate how identification of the strategic resources comes out of identification of the significant
operating factors to augment the example given above of electricity generation.

Car manufacture

One scenario for a car manufacturer when viewing the early 2000s might include increased
globalisation, increased importance of relationship marketing and increased customer
environmental awareness. These issues would be reflected in necessary changes in strategic
resources, with, for example, more emphasis placed on global branding (reputation), on aftersales
service (external relationships) and on the development of electronic engine management systems
(architecture).

Retail banking

Until recently, one of the biggest advantages that the retail banks had - and a feature that
protected them from new entrants - was their high-street branch networks. With automatic teller
machines in many convenient locations and with telebanking, these branches are no longer the
asset they were; indeed, they are becoming an expensive liability. This would imply that the banks
need to augment their strategic resources in the area of non-branch distribution, using other
'physical' outlets such as super- markets, and telephone, Internet and PC banking (architecture).

Supermarkets and branding

The rise in the power of the supermarkets has meant that the balance of power has shifted from
producers to retailers, and only the producers with very strong brands are able to resist
supermarket pressure. Thus the value of powerful brands has increased over the last decade or so,
and that of weak brands has fallen. The strategic resources needed by manufacturers are an
excellent reputation (reputation) or a very low cost base (architecture).

3.4 Step 4 - Establishing strengths and weaknesses

The strengths and weaknesses in a longer-term SWOT table are the present strategic resources
looked at in the light of the future significant operating factors. As strengths and weaknesses are
relative to future competitors, future competitors need to be identified to enable the strengths and
weaknesses to be unearthed.

Identifying future competitors

The most likely future competitors are the present competitors: after all, there is considerable
inertia in most organisations and sometimes in customers -it is said that there's more chance of
your being divorced than of changing your bank account. The next most likely future competitors
are the businesses that are not in the same competitive group as the target business but are
already operating within the same competitive arena.

The important feature when seeking to identify future competitors is not only to consider the
changing significant operating factors and how these might swing the balance of advantage to new
players but also what the businesses in the competitive arena are really providing to the customer.
Such an analysis was used to identify the substitutes to the businesses in the competitive arena.
The development of some relatively simple technology to allow the mains electricity grid to be
used to access the Internet introduced a potential competitor to the established cable, satellite and
deregulated telephone companies from an unexpected source. It was competition because it
satisfied the same customer requirements as the present incumbents of the competitive arena. So

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the touchstone is to look at what the offer does rather than what it is. The electricity distribution
companies weren't simply suppliers of electricity, they were electrical wave and impulse carriers
into virtually all homes in the developed world.

Separating strategic resources into strengths and weaknesses

In the light of the future competitors, present strategic resources will be assessed to determine
whether they are strengths or weaknesses in the future situation. This might require the collection
of further data on competitors, perhaps through bench-marking. The assessment of strengths and
weaknesses may be done formally through the creation of a table, as illustrated later.

3.5 Step 5 - Establishing opportunities and threats

Once the strengths and weaknesses have been identified, it is useful to separate the issues into
opportunities and threats. The opportunities are there to be taken advantage of, while threats
need to be guarded against; thus they are both important inputs to strategy formulation. It may be
that it's appropriate for the organisation to manage its relationships with its stakeholders to reduce
the threats and augment the opportunities. It may be that it's appropriate for the organisation to
manage its relationships with its stakeholders to reduce the threats and augment the
opportunities. The convergence of entertainment, communications and computers offers many
opportunities, especially if the opportunities can be widened through successful political lobbying,
as Rupert Murdoch seems able to do.

In a longer-term SWOT table, an organisation's strengths and weaknesses describe its present
relative standing in terms of strategic resources to likely future competitors within an operating
environment characterised by the future significant operating factors. These future significant
operating factors are identified by looking at the present significant operating factors and
considering how environmental issues will change and augment them.

4. An example of creating a longer-term SWOT Table

Many organisations would use the pattern of thinking described above in a rather informal way to
produce a SWOT table. Some organisations employ a more formal approach, and the formality of
the five-step approach is now illustrated through the use of an extended example. The example is
of an airline - which we'll call Speedijet - offering no-frills fares in Europe.

4.1 Step 1 - Determining the present position

Identifying the present competitors It is easy to identify the present competitors: they are all those
airlines operating in Europe. One strategic group would be composed of all the no-frills airlines that
are offering fares much lower than the established airlines such as BA and the national carriers in
continental Europe, which constitute another strategic group. Thus the present competitors to
Speedijet would include EasyJet, Go and Ryanair, together with all the national carriers. The
number of competitors is likely to be large, and the form of culling suggested in Section 2 might be
appropriate.

Identifying the present critical offer features

From considering the success of these airlines and from market research data, it is judged that the
present critical offer features from the point of view of Speedijet are the airports used, ticket price,
availability of flights, availability of seats on the flights, reputation for punctuality, ease of booking
a flight, and reputation for safety.

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Identifying the present significant operating factors

The present significant operating factors have been assessed, and are listed in the first column in
Exhibit 4.

PRESENT SIGNIFICANT STRATEGIC ISSUES FUTURE SIGNIFICANT

OPERATING FACTORS OPERATING FEATURES

1 Much lower costs than EU stance on cross subsidy 1 Airports used

established airlines by parents
Availability of central
airports
Airport facilities and ease 2 Much lower costs than the
2 Punctuality of land access major carriers
Safety monitoring of 3 Cross subsidy by parent
aircraft to a common airlines
European standard 4 Number of flights offered by
the major carriers

3 Airports used Renaissance of air travel 5 Punctuality

EU / national government
4 Perceived safety stance on noise pollution
EU / national government /
trade union stance on
aircrew registration
Demand for both business
and leisure travel

Exhibit 4: The Link between Present & Future Significant Operating Factors

4.2 Step 2 - Determining the future significant operating factors

The issues

An environmental analysis might have thrown up the eight strategic issues set out in the second
column of Exhibit 4. It is considered that the no-frills airline Go, which is a subsidiary of BA, was set
up in order to put the independent no-frills airlines out of business, with BA subsidising Go's
activities. Thus the EU stance on cross-subsidy is very important.

The effective embargo on the no-frills airlines using the central airports such as Heathrow, and the
poorer airport facilities and access by road and rail at the smaller airports that the no-frills airlines
have to use, are both major issues. The monitoring of aircraft safety is to be tightened. The Channel
Tunnel and pollution and congestion fears are bringing about a renaissance in rail travel. The EU
and national government stances on noise could be significantly altered in the medium term. The
EU, national government and union stances on aircrew costs could be significant; currently, the
social cost of using aircrew registered in continental Europe is an inhibiting factor, and if aircrew
could be registered in the UK or Ireland the costs to the airlines would be much lower. The demand
for low-cost business and leisure travel is strong.

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The future significant operating factors

The issues will change the significant operating factors, perhaps to those shown in column 3 of
Exhibit 4. This shows the addition of two new factors: the cross- subsidy by parent airlines and the
number of flights offered by the established airlines. This latter significant operating factor comes
about because, in the face of the threat from no-frills airlines in the USA, the established carriers
flew many more flights than usual on the routes where they were being challenged, a tactic that
was successful in limiting the number of passengers that the no-frills airlines could persuade to
change allegiance and travel with them. The importance of the significant operating factors has
also changed; the airports that the no-frills airlines can use form the most import- ant factor, driven
by the expected tightening of noise pollution regulations and the renaissance in rail travel using
central city termini. The enhanced monitoring of aircraft standards has meant that no airline,
including the no-frills airlines, needs to concern itself with public perceptions of safety, since this is
guaranteed by the European standards authority. Thus safety ceases to be a significant operating
factor in the future.

4.3 Step 3 - Determining the future strategic resource needs

The five future significant operating factors are listed in the first column of Exhibit 5. For each, the
strategic resources needed to establish a strong competitive position have been listed in column 2,
with the type of strategic resource indicated in column 3.

The assumption in creating the third column is that Speedijet has all of the resources in house.
Where this wasn't the case, as perhaps it wouldn't be for the legal activity, then the strategic
resource would be in external relationships.

STRATEGIC RESOURCE NEEDED TYPE OF STRATEGIC RESOURCE

FUTURE SIGNIFICANT TO ESTABLISH A STRONG
OPERATING FACTORS COMPETITIVE POSITION
Lobbying of national External relationships
Airports used governments & EU
Commissioners
Much lower costs than
the major carriers Lean manning Architecture
Crew costs Architecture, external
relationships
IT skills Architecture
Aircraft scheduling Architecture
Marketing to fill capacity Architecture
Efficient ticketing Architecture
Fast maintenance Architecture
Cross subsidy by parent
airlines Legal skill Architecture
Close monitoring of main Architecture, external
carriers operation relationships
Lobbying of EU commissioners External relationships
Number of flights
offered by major carriers Efficient maintenance Architecture
Punctuality Crew fostering Architecture
Extra aircrew Architecture
Publicising punctuality External relationships
Exhibit 5: The Strategic Resources Needed in the Future

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4.4 Step 4 - Establishing strengths and weaknesses
Identifying future competitors

Future competitors are likely to include the present competitors. However, apart from SouthWest
airlines, the no-frills airlines that were born out of the US deregulation in the early 1990s have all
failed, so it is unlikely that the major US airlines will create no-frills airlines in Europe.

Future competitors are likely to include subsidiaries of the national carriers in continental Europe
as they become denationalised over the coming years. Coupling the future strategic resources
needed with the likely future competitors will allow the strengths and weaknesses of Speedijet to
be established. Exhibit 11.6 is the resulting strengths and weaknesses table. SJ is Speedijet, B is Go,
and C and D are two other no-frills airlines. Managerial judgement is used to establish the ratings
of Speedijet and each competing airline for each future strategic resource on a scale of + 2 to -2.
This rating suggests, for example, that Speedijet is strong on lean staffing and crew costs, but weak
on aircraft maintenance and legal skills. It is neither strong nor weak compared with competitors
on publicity or punctuality.

FUTURE STRATEGIC RESOURCE FUTURE COMPETITORS

REQUIREMENTS SJ B C D S/W
+2 +1 +1 0 S
1 Lobbying of national
governments & EU
Commissioners on airports used
2 Lean manning +2 -1 +1 +1 S
3 Crew costs +2 -2 +1 0 S
4 IT Skills -1 0 +2 +1 W
5 Marketing to fill capacity +1 +2 -1 -1 W
6 Efficient ticketing +2 +2 -2 0 S
7 Fast maintenance -1 +1 -2 0 W
8 Legal skill +1 +2 0 0 W
9 Close monitoring of the major -1 +2 +1 -1 W
carriers operations
10 Lobbying of EU commission 0 +1 +1 0
on cross subsidy S
11 Efficient maintenance +1 +2 -1 0 W
12 Crew Fostering -1 +1 -2 0 S
+1 +2 -2 0 W
13 Extra aircrew
14 Publicity & punctuality +2 +2 0 0 -

Exhibit 6: Strengths and Weaknesses

4.5 Step 5 - Establishing opportunities and threats

An example of a SWOT table for Speedijet is given in Exhibit 7. What are opportunities and what
are threats will be determined by inspection of the relative standing of Speedijet on the issues set
out in Exhibit 4. The availability of central airports is not included in the SWOT table, because it is
not considered either an opportunity or a threat. Note that the issues listed in the SWOT table
include a firm statement on each issue; the issue is safety monitoring of aircraft to a common
European standard, whereas the entry in the SWOT table is that applicable to one scenario, e.g.
tightening of safety monitoring of aircraft to a common European standard.

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STRENGTHS WEAKNESSES

Lobbying of national governments & EU on IT Skills

airports used Marketing to fill capacity
Lean manning Speed of maintenance
Crew costs Legal skills
Efficient ticketing Monitoring of major carriers
Lobbying of national governments & EU on Efficiency of maintenance
cross subsidy Extra aircrew
Crew fostering
OPPORTUNITIES THREATS

EU stance on cross-subsidy remains weak

Tightening of safety monitoring of aircraft to a
common European standard
Airport facilities and ease of land access do not
EU stance on aircrew registration softens improve
Renaissance of rail travel
Increasing demand for both business & leisure
travel EU / national stance on noise pollution stiffens

Exhibit 7: An Example of a SWOT Table for a No-Frills Airline

4.6 The new SWOT table

Note that the strengths and weaknesses are internal factors and must be relative to competitors,
rather than an absolute view. This shift to a comparator frame of reference may suggest to an
organisation that it would be fruitful to spend some time com- paring itself against competitors to
see whether it really is as good as it thinks it is.

Also note that the opportunities and threats are in the environment -they aren't actions that the
business might carry out. For example, it would be inappropriate to have as an opportunity a
statement such as move to register aircrew in the UK or in Ireland: the appropriate entry is EU
stance on aircrew registrations softens. The SWOT table suggests strategic direction but doesn't
contain it.

5 Further considerations

5.1 Relative emphasis in a SWOT table

The strengths and weaknesses are identified from considering assets, processes and capabilities:
opportunities and threats from a structural analysis. The relative emphasis to put into these two
aspects of position determination will depend on the environmental dynamism. Stalk et al take a
very strong line:

‘When the economy was relatively static, strategy could afford to be static. In a world characterised
by durable products, stable customer needs, well-defined national and regional markets, and
clearly defined competitors, competition was a 'war of position' in which companies occupied
competitive space like squares on a chessboard.

Competition is now a 'war of movement' in which success depends on anticipation of market

trends and quick response to changing customer needs. Successful competitors move quickly in
and out of products, markets, and sometimes even entire businesses -a process more akin to an

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interactive video game than to chess. In such an environment, the essence of strategy is not the
structure of a company's products and markets but the dynamics of its behaviour’.

5.2 Sensitivity analysis

The whole of the discussion in this chapter so far has assumed one view of the future -one
scenario. The whole point about scenarios is that the future can't be predicted and that a set of
scenarios is needed to force consideration of alternative futures. Thus it would be inappropriate to
carry out the SWOT analysis for one scenario only. One approach is to repeat the analysis for each
scenario. However, this can be very time-consuming, and a short-cut is to consider the effect that
different values of the scenario variables might have on the entries in the SWOT table. The effect of
the significant variables can then be debated to revise the SWOT table entries.

SUMMARY

1. A Strengths, Weaknesses, Opportunities and Threats (SWOT) table provides a framework

for organising either intuitive information or the results of more formal analyses to establish an
organisation's strategic position in its environment and vis-a-vis its competitors. The production of
a SWOT table isn't easy: a great deal of mental discipline is needed. What is a strength and what is
a weakness is relative to competitors in the context of the environment. And what is an
opportunity and what is a threat is relative to the environment in the context of the position vis-a-
vis competitors.

2. The tension between the near and more distant futures is evident in the building of a
SWOT table. The concern in developing a SWOT table for the near future is likely to be the critical
offer features and the present significant operating factors. The concern in developing a SWOT
table for the longer term is with future significant operating factors and with strategic resources.
(Exhibit 2)

3. There are five main steps in arriving at a SWOT table appropriate for the short term:

 identify the present competitors;

 identify the present critical offer features;
 identify the present significant operating factors;
 identify the present strategic resources;
 identify the present issues and divide them into opportunities and threats- .

4. There are also five main steps in arriving at a longer-term SWOT table:
 identify the present situation;
 identify the future significant operating factors;
 identify the future strategic resource requirements;
 determine where the organisation's strengths and weaknesses lie in respect to the future
strategic resource requirements;
 divide the issues into opportunities and threats. (Exhibit 2)

5. The determination of present competitors is fairly easy; determining future competitors is

more difficult. Future competitors will include those whose strategic resources make them
well placed with regard to the future significant operating factors.

6. In arriving at a SWOT table, considerable judgement will have been exercised by leader-
managers. The table will have been developed within the mindset and paradigm of the
participants. This could lead to a blinkered vision of the organisational position. There may

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 be several SWOT tables depending on the number of views of the future (scenarios) that
are considered.

STRENGTHS WEAKNESSES

Traditional family based relationships High level of fixed costs

Customer inertia Poor level of customer service
Branch network Lack of customer information
Product range Product not market focused
Management skills / resources Lacks brand strength
Processing technology Lack of flexibility to respond
Communication network Traditional management practices
Brand image Complexity of operations
Trustworthy reputation
OPPORTUNITIES THREATS

Develop enhanced customer service New market entry competition

Develop effective marketing systems
Reduced cost structure New technologies
New distribution opportunities Product innovation
Market/product/customer/segmentation Changing customer attitudes/needs
Product innovation Innovative delivery systems
Social change Legislation
Brand positioning/strengthening

Exhibit 8: SWOT Table for a Retail Bank

Prepared by ADC, December, 2010

Source: ‘Strategic Management’, by Paul Finlay
Published by Financial Times – Prentice Hall
ISBN 0 – 201 – 39827 - 3

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