Purpose of a SWOT Analysis Essay

either communication channel to include the largest ones that control their areas of industryhas a limited supply of manpower, production capacity and capital. Evaluating the political partys strong suits, weaknesses, opportunities, and threats athletic supporters it determine how to allocate these resources in a manner that will result in the highest possible strength for revenue gain and profitability. The management team examines where the order female genitals contest most effectively.The go with more times than not discovers competitive strengths that exhaust not been fully utilized in the past in admission to critical areas that needs to be improved in order for the business to more effectively compete. A realistic assessment overly prevents strategical blunders like entering a market with products that are clearly low-level to what well-entrenched competitors are completeering. Continuous improvement in all areas of a smart sets operations is an important as pect of staying ahead of competitors.Weaknesses and opportunities canand essentialbe turned into future strengths. occasion OF A mug up digest 3 Strengths, weaknesses, opportunities, and threats ( prink) summary is a necessary, straightforward standard that assists in counselor and serves as a foundation for the information of businesss merchandise strategy. It brings about this process through assessment of the organizations strengths (what it can do) and weaknesses (what it cannot do) in addition to opportunities (potentialfavorable conditions for the company) and threats (potential unfavorable conditions for it). SWOT analysis is also an important step in the planning process but sometimes its value is often minimized in spite of how simple it is in creating it. The role of SWOT analysis is to take the learning from the environmental analysis and separate it into internal issues (strengths and weaknesses) and external issues (opportunities and threats).Once this is compl eted, SWOT analysis determines if the information indicates something that will assist a business in meeting its objectives (a strength or opportunity), or if it identifies an obstacle that must be overcome or minimized to achieve desired results (weakness or threat). The purpose of a SWOT analysis is to get managers into the mindset and thinking about everything that could possibly be an impact to the success and failure of a new project. Failing to hump an essential strength, weakness, opportunity or threat could and usually does lead to unnameable management decisions.Take for example, a software company that might bag a patent for a new computer processor failed to substantiate a threat from its competitors who were also sprouting comparable products, it might overrate conceivable sales of its new processor and assume debt to finance the growth of its project only to notice down the line that the companys promising product will not make ample funds to make a profit or ev en pay off the assumed debt. A SWOT analysis could have helped this companys management avoid expensive mistakes early on and alerted them to which products were more believably to succeed.PURPOSE OF A SWOT ANALYSIS 4 With SWOTs origins dating back to the 1960s with Albert Humphrey, it is as useful now as it was back then. Businesses utilize the process in two different ways-as an uncomplicated icebreaker assisting individuals come together to kick off strategy development or as a more serious strategy tool. A great SWOT analysis case study is Starbucks Coffee. By 2010, the company was losing money and had a major drop in its contrast price. Its stock price had dropped to around $10 in 2009 from its high of $35 a few years earlier.The economic crisis throughout 2008 and 2009 really match Starbucks stock price hard (SBUX Basic Chart Starbucks Corporation behave Yahoo Finance, 2011). Even though Starbucks stock price took a spacious stunner, its net revenues did not. Starbuck s profits went from $7. 8 gazillion in 2006, to $10. 4 billion in 2008, down to $9. 8 billion in 2009, and back up to $10. 7 billion in 2011 (Starbucks Corporation, 2010). The amazing thing here is that the company endured an economic crisis and still come out strongerthan when its stock price was at its highest. Lauren Roby (2011) performed a well researched SWOT analysis of Starbucks covering this time frame and identified the following strengths, weaknesses, opportunities, and threats. Strengths 1 Market leader in the cocoa industry including almost 17,000 stores as of the end of the 2010 (Starbucks Corporation, 2010). 2. Starbucks is recognized by customers intercontinental due in part to its high quality products and consumer friendly environment. 3. Starbucks is on good footing financially.Its stock price might have fall in the late 2000s, but its profits barely took a hit (Starbucks Corporation, 2010). Weaknesses PURPOSE OF A SWOT ANALYSIS 5 1 one and only(a) of Starbuck s biggest weaknesses is what its customers have to pay for the product. McDonalds uses Starbucks high price directly against the company in their attempts to lure customers away from the company and into the arches. 2 75% of the companys profits come from its chocolate products and other specialty drinks (Starbucks Corporation, 2010).This substance that when global umber bean prices fluctuate, the company will take a direct hit every time the price of coffee rises. Opportunities 1. world(prenominal) Markets. With Brazil being one if not the worlds largest coffee consumer in the world, it offers a huge market for Starbucks to enthusiastically enter and develop (Murphy, 2011). 2. Starbucks has joined forces with Tata coffee in India, which is the fifth largest exporter of coffee, to begin selling their coffee worldwide (Bose, 2011). This gives Starbucks moreaccess to coffee. Threats 1. Competition. One of Starbucks biggest competitors, McDonalds, can clean their McCafe brand bever ages in current franchise stores globally to include Europe. This gives McDonalds an upper hand on Starbucks who has to invest over $300,000 to open a brand new store in Europe while McDonalds investment would run around $100,000 (Liu, 2009). If McDonalds continues down this path, it could greatly cut off the geographic scope advantage that Starbucks currently has over McDonalds.These days, It is not enough to just recognize the strengths, weaknesses, opportunities, and threats of a business. In exercising a SWOT analysis it is essential to reduce or avert both PURPOSE OF A SWOT ANALYSIS 6 weaknesses and threats. Weaknesses should be viewed as something to be turned into strengths as threats should be turned into opportunities. Strengths and opportunities should be allied to optimize the businesss potential. Utilizing SWOT in this manner can help a company gain the leverage most so desperately need these days. (Ferrell, Hartline, Lucas, Luck, 1998).