SWOT Analysis

SWOT analysis:

SWOT analysis tool used in “Identify Risk” process of “Project Risk Management” knowledge area and “Planning” process group by PMP.

This tool is required to make sure all the possible risks are identified and included in the “Risk Register”.

SWOT analysis lets you analyze Strengths, Weaknesses, Opportunities, and Threats.

First start by brainstorming strengths and weaknesses, and then validate the strengths to find opportunities, and look at the weaknesses to come up with threats to the project.

Factors affecting a project can usually be classified as:

•          Internal factors

–        Strengths (S)

–        Weaknesses (W)

•          External factors

–        Opportunities (O) 

–        Threats (T)

•          Strengths

–        Positive tangible and intangible attributes, internal to a project. They are within the project’s control

•          Weaknesses

–        Factors that are within a project’s control that detracts from its ability to attain the core goal. In which areas might the project improve?

•          Opportunities

–        External attractive factors that represent the reason for a project to exist and develop. What opportunities exist in the environment which will propel the project?

–        Identify them by their “time frames”

•          Threats

–        External factors, beyond a project’s control, which could place the project’s mission or operation at risk. The project may benefit by having contingency plans to address them should they occur

–        Classify them by their “seriousness” and “probability of occurrence”

For a productive SWOT analysis:

•          Stay focused. Be specific and avoid grey areas. Keep your swot short and simple. Avoid complexity and over analysis

•          Collaborate with other functional areas

•          Examine issues from the customers’/ stakeholders’ perspective

•          Look for causes, not characteristics

•          Separate internal issues from external issues

SWOT-driven planning:

•          The assessment of strengths and weaknesses should look beyond products, services and resources to examine processes that meet customers’ or stakeholders’ needs

•          Achieving goals and objectives depends on transforming strengths into capabilities by matching them with opportunities

•          Weaknesses can be converted into strengths with strategic investment.  Threats can be converted into opportunities with the right resources

•          Weaknesses that cannot be converted become limitations which must be minimized if obvious or meaningful to customers or stakeholders

Example for SWOT analysis:

Nokia Corporation (NYSE: NOK) is one of the world’s largest telecommunications equipment manufacturers. It has since established a leading brand presence in many local markets, and business has expanded considerably in all areas to support customer needs and the growth of the telecommunications industry. Nokia also produces mobile phone infrastructure and other telecommunications equipment for applications such as traditional voice telephony, ISDN, broadband access, professional mobile radio, voice over IP, wireless LAN and a line of satellite receivers. Nokia provides mobile communication equipment for every major market and protocol, including GSM, CDMA, and WCDMA.

Strengths: -

Nokia has largest network of distribution and selling as compared to other mobile phone company in the world. It is backed with the high quality and professional team in the HRD Dept. The financial aspect is very strong in case of Nokia as it has many more profitable business. The product being user friendly and have all the accessories one want that is why is in great demand making it No-1 selling mobile phones in the world. Wide range of products for all class. The re-sell value of Nokia phones are high compared to other company’s product.

Weakness: –

Nokia has many strengths and some weakness. Some of the weakness includes the price of the product offered by the company. Some of the products are not user friendly. Not concern about the lower class of the society people. Not targeting promotion toward them. The price of the product is the main issue. The service centers in India are very few and scare. So after sales service is not good.

Opportunity: -

Nokia has ample of opportunity to expand its business. With the wide range in products, features and different price range for different people, it has an advantage over the competitors around. With the opportunity like Telecom penetration in India being at the peak time, Nokia has an opportunity to increase its sales as well as the market share. As the standard of living in India has increased the purchasing power of the people as increased as well, so Nokia has to target right customer at right time to gain the most out of the situation.

Threats: –

Nokia has many threats to tackle to maintain its position as market leader. The threats like emerging of other mobile companies in the market. The companies like Motorola, Sony Eriksson, Cingular (U.S) etc. these companies have come to the stand of tough competition with Nokia in the field of Mobile Phones. Threats can be like providing cheap phones, new features, new style and type, good after sales service etc. So, Nokia has to keep in mind the growing competition around. Nokia has to make strategies to tackle problems in the present and the near future. The growing demand of WLL network can cause drop in sales for Nokia, as Nokia provides many less CDMA phones to the customer.

Major benefits of SWOT analysis:

•          Simplicity

•          Flexibility

•          Integration and synthesis

•          Collaboration

•          Lower costs

Disadvantages of SWOT analysis:

•          SWOT analysis can be very subjective. Do not rely too much on it.

•          Two people rarely come up with the same final version of a SWOT