Marketing (UNR471)

Dr. Mohamed Sameh

Marketing: SWOT Analysis
 What is a “SWOT Analysis”?

• a SWOT analysis is a tool that analyzes an organization and its

environment.

• It is one of the first stages in the marketing plan process and helps
marketers focus on key issues to:
• Discover new opportunities
• Manage and eliminate threats
 What is a “SWOT Analysis”?

• SWOT analysis can be used for a variety of purposes

• It could be company based or product based….it simply depends on what it
is you want to analyze
• Ie:
• How does our company compare with the competition ?
– (Zellers vs Walmart, Petro Canada vs Shell, Honda vs Mazda, etc)

• How does our product compare with the competition ?

– (Mac vs PC, Pepsi vs Coke, Ipod vs Zune, etc.)
The Situation (S.W.O.T.) Analysis

Strengths
S Resources and capabilities that can be used
as a basis for developing a competitive advantage

W Weaknesses
Qualities that give a business a competitive disadvantage

O Opportunities
Events that could facilitate company profit and growth

T Threats
Events that could have a negative impact on the company
Strengths and weaknesses are internal factors.

Opportunities and threats are external factors

 Strengths:

• What is the business good at ?

• What is it you do better than your competition?
Examples:
A new or innovative product or service

Location of your business

Low prices

High Quality
Weaknesses:

• What is the business doing wrong?

• What does your competition do better than you?

• What should you avoid?

Examples:
Undifferentiated products or services (i.e. in relation to your competitors)
Location of your business
Poor quality goods or services
 Opportunities

Areas where the company could take advantage of to improve their

situation (trends, technology, etc.)
Examples:
A developing market (ie – Internet)

Moving into new market segments that offer improved profits

A market vacated by an ineffective competitor

A new international market
Threats

• Anything that could feasibly harm your business

• Situations that could lead to lost business

Examples:

New competitor in your home market.

Price wars with competitors.

A competitor has a new, innovative product or service.

• By performing a SWOT Analysis, a company can see
where they are positioned relative to their competition

• A SWOT analysis may provide ideas for:

• “opportunities”
» see and validate a “gap” and create a product /
service to fill it)

• “caution”
» it may force you to reconsider or completely stop an
idea from continuing (competition is too fierce,
product idea isn’t “different” enough, etc.)
• A great “analogy” for a SWOT analysis is that of the
great “do I dive into the pool or not” scenario…..

• You have several options:

1. You can just dive in ……

(therefore, don’t do your research or SWOT

analysis and live with the results……)
 2. You can put your toe into the water to gather
information and make a decision………
(therefore, you do your research and base your decision to move forward or not based on
your SWOT analysis of the pool)
Ie –
• it is warm, so you jump in

• It is cold, so you decide to stay out and wait for

the environment or water to heat up….and then
reassess
• It is too cold, so you decide to stay out and cut your losses
• As a result, performing a SWOT analysis is
simply making the decision as to whether
we’re going to jump into the pool or back off
and do more research……..
• So, now that we know what a SWOT analysis
is, let’s do one for a company…..
 Strengths:

• A powerful retail brand - it has a reputation for value for

money, convenience and a wide range of products all in
one store.
• Substantial growth in recent years
• Economies of scale (purchasing, manufacturing, etc).
Weaknesses

• Fath Allah is one of the largest grocery retailers in Egypt

and control could leave weakness in some areas due to
the huge span of its branches.

• Since Fath Allah sells products across many sectors

(such as clothing, food, or stationary), it may not have
the flexibility of some of its more focused competitors.

• The company is local and has no global recognition yet.

 Opportunities

• The stores currently only trade in Egypt. Therefore, there are

tremendous opportunities for future business in expanding consumer
markets, specially in Arab countries.
• New local locations in new cities offer opportunities to exploit market
development at relatively low prices.
• New specialized store types offer opportunities to explore new
markets.
• Boycotting some competitors (Like : Carrefeur).
 Threats

• Being a large competitor means that you are the target

of competition strategies.
• Being a wide retailer means that you are exposed to
political problems where you operate.
• Stigma of using “cheap labor” in overseas “sweat shops”
has hurt reputation .
• Decreased sales with increasing prices and low
incomes.
 Opportunities
Strengths • Expanding consumer markets, specially
• A powerful retail brand - has a reputation in Arab countries.
for value for money, convenience and a • New local locations in new cities offer
wide range of products all in one store. opportunities to exploit market at
• Substantial growth in recent years relatively low prices.
• New specialized store types to explore
• Economies of scale (purchasing,
new markets.
manufacturing, etc.).
• Boycotting some competitors (Like :
Carrefeur).
Weaknesses Threats
• Control could leave weakness in some • You are the target of competition
areas due to span of its branches. strategies.
• Sells products across many sectors (such • Being exposed to political problems
as clothing, food, or stationary), which
where you operate.
may not have the flexibility of some of its
more focused competitors. • Stigma of using “cheap labor” in
• The company is local and has no global overseas “sweat shops”.
recognition yet.
 Decisions

• Focus on local expansion and increasing market share.

• Expand to new specialty brands such as “TREE” for
clothes & “Rose garden” for consumables.
• Diverse selections and including Egyptian brands.
• Start a marketing campaign to refute the rumors about
using sweat shops.
• Study the costs of regional expansions.
• Make a lot of promotions to increase foot work into the
markets to increase sales
• now let’s do one for a specific product…..

Nintendo Wii
Strengths:

• Nintendo brand recognition (well known worldwide)

• Wireless Wii Remote – can detect 3 D motion (only one of its

kind)….differentiates from competition (joystick / gamepads)

• Cheaper than competition….$250 vs $399 (Xbox) and $500

(PlayStation 3)
Weaknesses

• Slower processor vs competition

• No hard drive

• No DVD drive

• Weaker graphics vs competition

Opportunities

• Created new “niche” market / new video game

experience….create new games and experience that can’t be
matched

• Less processing / No DVD capability = less costs = ability to

sell for less than competition
 Threats

• Competition copycat “new” idea

• Competition creates new technology that improves

upon Wii “experience”
Decisions

• As a result, Nintendo’s SWOT analysis showed that their

product was different and that there was evidence that the
product should move forward

• Although further research must be conducted as the product

moves through the rest of the marketing mix, the SWOT
analysis supports Nintendo’s competitive position both as a
company and for this specific product
Conclusions:

• All busineses can profit from performing a SWOT

analysis
• A SWOT analysis is a continual process….the
business environment is continually changing

• By understanding your situation, you can

proactively make business decisions for both the
present and future to ensure success