Strategic Mgt

1. SWOT ANALYSIS
FORMULATION
Name - Pooja
Roll No - 180010501028
Subject -Strategic Management
M.Com 2nd Year (4th sem)

2. CONTENT
• Meaning of SWOT Analysis
• Advantages of SWOT Analysis
• Disadavantages of SWOT Analysis
• SWOT Analysis Framwork
• Steps in Strategy Formulation Process

3. What is SWOT Analysis?
SWOT analysis (Strength, Weakness, Opportunities and Threats
Analysis) is a framework for identifying and analyzing the internal
and external factors that can have an impact on the viability of a
project, product place or person.

4. Definition SWOT Analysis
A strategic management tool evaluate the firm, which accomplished
by identifying its strengths and weaknesses and identifying its
opportunities and threats.
Conducting A SWOT Analysis
Step 1 : Identifiy internal environment by identifying its strengths &
weaknesses.
Step 2 : Identify external environment by identifying its
opportunitites & threats.
Step 3 : Cross match strengths with opportunities, weaknesses with
threats strengths with threats & weaknesses with opportunities.

5. Advantages of SWOT Analysis
SWOT Analysis is instrumental in strategy formulation and selection.
it is a strong tool, but it involves a great subjective element. It is best
when used a guide, and not as a prescription. Successful
businesses build on their strengths, correct their weakness and
protect against internal weaknesses and external threats. They also
keep a watch on their overall business environment and recognize
and exploit new opportunities faster than its competitors.
SWOT Analysis helps in strategic planning in following manners:-
• It is a source of information for strategic palnning
• Builds organization's strengths.
• Reverse its weaknesses.
• Maximize its response to opportunities.
• Overcome organization's threats.
• It helps in identifying core competncies of the firm
• It helps in setting of objectives for strategic planning.

6. Disadvantages of SWOT Analysis
1. SWOT analysis is only one stage of business planning
2. A lack of hierarchy leads to problems
3. Too much structure leads to poor decision making
4. SWOT analysis becomes impossibly subjective without the right
information.
5. Information overload affects your results.

7. SWOT Analysis Framework
SWOT Analysis is not free from its lmitations. It may cause organization to
view circumstances as very simple because of which the organization
might overlook certain key strategic contact which may occur. Moreover,
categorizing aspects as strengths, weaknesses, opportunities and threats
might be very subjective as there is great degree of uncertainty in market.
SWOT Analysis does stress upon the significance of these four aspects,
but it does not tell how an organization can identify these aspects for itself.
Enviromental Scanning
Internal Analysis
• Strengths
• Weakness
External Analysis
• Opprtunities
• Threats

8. There are certain limitations of SWOT Analysis which are not in control of
management. These include-
(a) Price Increase
(b) Inputs/raw materials
(c) Government legislation
(d) Economic environment
(e) Searching a new market for the product which is not having
overseas market due to import restriction.

9. Strengths
• Quality is Maytag Culture
• Experienced to management
• Vertical integration, as company
owns dedicated factories
• Good employee relations
• Hoover's international orientation
Opportunities
• Economic integration of European
Community
• Demographics of European and
American favor quality appliance
• Economic development of Asia
• Opening of Eastern Europe
• Trend to “Super Stores”
Weakness
• Not process-oriented R&D
• Distribution channels are weak
• Finance position weak
• Global Positioning not favorable
Threats
• Increasing government regulations
• Strong US competition
• Whirlpool and Electrolux strong
Globally
• New product advances
• Japanese appliance companies

10. Importance of SWOT Analysis
The most important part of a SWOT analysis is to improve the
viability of your company. Important threats coupled with a company
weakness typically put at risk your company's future, and the SWOT
analysis identification these risks. You can eliminate internal
weakness by assigining company resources to fix the problems.

11. STEPS IN STRATEGY FORMULATION PROCESS
Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of
organizational goals and objectives and thereby achieving the organizational vision. The process of strategy formulation
basically involves six main steps.
1. Setting Organizations’ objectives - The key component of any strategy statement is to set the long-term objectives
of the organization. It is known that strategy is generally a medium for realization of organizational objectives.
2. Evaluating the Organizational Environment - The next step is to evaluate the general economic and industrial
environment in which the organization operates. This includes a review of the organizations competitive position.
3. Setting Quantitative Targets - In this step, an organization must practically fix the quantitative target values
for some of the organizational objectives.
4. Aiming in context with the divisional plans - In this step, the contributions made by each department or division or
product category within the organization is identified and accordingly strategic planning is done for each sub-unit.
5. Performance Analysis - Performance analysis includes discovering and analyzing the gap between the planned or
desired performance. A critical evaluation of the organizations past performance, present condition and the desired future
conditions must be done by the organization.
6. Choice of Strategy - This is the ultimate step in Strategy Formulation. The best course of action is actually chosen after
considering organizational goals, organizational strengths, potential and limitations as well as the external opportunities.

12. “Thank You”