SWOT analyzes is used to understand what kind of strength, weakness, opportunities and treats exist for a company. This analyzes are mainly concentrating on internal factors of a company to understand how it fits to its environment. There is a widespread discussion among academics and businessmen whether this analyses are effective or not. It is because majority of businesses who has such kind of exploration do not use it in core of its strategy but just as a thing to show that it has. Therefore, conclusion is that, if you are not going to use it in a future for your company strategy it is not worthy to spend time on it but in the other case it is really helpful tool for businesses. Let us discuss all four parts of SWOT separately.
Strength are characteristics of a company, which distinguish it from competitors in a positive way. Strength is an internal factor of a company and is under control of company’s management. Some examples of Strength that companies can have:
· Strong brand portfolio (Heinz)
· Strong Research & Development (Nestle)
· Rigorous food safety standards (McDonald’s)
· High-quality food (Whole Foods)
· Sales in approximately 160 countries (Kraft Foods)
· Global coffee brand built on reputation for fine products and services (Starbucks)
Weaknesses are
also internal characteristics of companies and should be examined in order to eliminate or reduce. Some examples of Weaknesses:
· Selling products across many sectors (e.g. clothing, food, hardware, etc.) may prevent having the flexibility of its more focused competitors (Walmart)
· Difficulty finding and retaining employees (McDonald’s)
· Revenues heavily concentrated in the U.S. (Campbell’s Soup)
· Product pricing - expensive (Starbucks)
Opportunities are external factors and related to macro and microenvironment of a company.
Opportunities should be revealed in order to implement them by using strength that company has. Some examples of opportunities:
· Co-branding with other food and drink manufacturers (Starbucks)
· U.S. economic slowdown shifting consumer habits from restaurants to retail food stores (Campbell’s Soup)
· Continue with strategy of building large supercenters (Walmart)
Threats are also external factors and come from macro and micro environment. Companies should try to diminish the impact of threats to them. Some example of threats
· Volatile resource costs - i.e. sugar, corn (Kraft Foods)
· Sluggish growth of carbonated drinks (Pepsi)
· Increasing labor costs
· Changing consumer habits towards healthier food choices (Domino’s Pizza)
· Pressure from unions (Walmart)
· Government regulations (Coca-Cola)
Here is an interesting example of SWOT analyses in Armenian tea market, which can serve you as a guideline while your research.
Strengths
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Weaknesses
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1. Professional staff and specialized pharmacist-doctors
2. High quality of products
3. Developed supply chain
4. Strong ongoing relationship with international social-oriented organizations, like World Vision
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1. Weak financial position
2. Weak distribution chain
3. Not good brand name and logo
4. Unattractive and inconvenient
packaging
5. Poor promotion
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Opportunities
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Threats
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1. Gaining new market shares:
Armenian marzes (regions) and
external market of Georgia and
Iran
2. Attracting donors as an eco friendly and socially important company
3. More availability of newer technologies that help optimize production process
|
1. New entries
2. Illegal competition possibility from big pharmacy distribution chains
3. Probable tax law changes related to agricultural sphere
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