SWOT Analysis Example ( Case Study)
- What does the company do well?
- Is the company strong in its market?
- Does the company have a strong sense of purpose and the culture to support the purpose?
- What does the company do poorly?
- What problems could be avoided?
- Does the company have serious financial liabilities?
- Are industry trends moving upward?
- Do new markets exist for the company‚Äôs products/ services?
- Are there new technologies that the company can exploit?
- What are competitors doing well?
- What obstacles does the company face?
- Are there troubling changes in the company‚Äôs business environment (technologies, laws, and regulations)?
The following case study demonstrates how SWOT can be used to create a strong business strategy.
In the mid-1990s, Dell Computer used a SWOT analysis to create a strong business strategy that has helped it become a very strong competitor in its industry value chain. Dell identified its strengths in selling directly to customers and in designing its computers and other products to reduce manufacturing costs. It acknowledged the weakness of having no relationships with local computer dealers. Dell faced threats from competitors such as Compaq and IBM, both of which had much stronger brand names and reputations for quality at that time. Dell identified an opportunity by noting that its customers were becoming more knowledgeable about computers and could specify exactly what they wanted without having Dell salespersons answer questions or develop configurations for them. It also saw the internet as potential marketing tool. The results of dell‚Äôs SWOT analysis are:
- Sell directly to consumers
- Keep costs below competitors
- No strong relationships with computer retailers
- Consumer desire for one-stop shopping
- Consumers know what they want to buy
- Internet could be a powerful marketing tool
- Competitors have stronger brand names
- Competitors have strong relationships with computer retailers
The strategy that Dell followed after doing the analysis took all for of the SWOT elements into consideration. Dell decided to offer customized computers built to order and sold over the phone, and eventually, over the internet. Dell‚Äôs strategy capitalized on its strengths and avoiding relying on a dealer network. The brand and quality threats posed by Compaq and IBM were lessoned by dell‚Äôs ability to deliver higher perceived quality because each computer was custom made for each buyer.
The SWOT Template
SWOT Case Study
In this post we will provide a step-by-step example of how to create a SWOT analysis. For this purpose, we are using a fictitious company called “Foods & Drinks Inc.”
Start by listing the strengths of the company. Be as specific as possible and use characteristics that are internal to the company. Be sure to prioritize the strengths to include the most important ones.
- Food & Drinks Inc. has flexibility to implement new business strategies
- The company has seen a 10% boost in sales in the last 5 years
Follow strengths by listing the weaknesses of the company. Weaknesses are internal and negative aspects of the company; keep in mind that it’s important to list and focus on weaknesses that can be changed or improved upon.
- Small portfolio of products concentrated in a few categories of food products
- Limited and only local distribution network
- Limited budget for advertising and marketing
In the opportunities section, be sure to include positive external facts such as market growth opportunities or consumer trends that might impact your company. It is also important to think about how can you use the company strengths to increase opportunities. For example:
Comparing market sizes and growth for category expansion in emerging markets
Using data from Euromonitor International’s Industry forecast model, we are able to identify the biggest categories of the packaged foods industry. We can also use information about the category growth rates categories to identify portfolio expansion opportunities.
According to the data in the chart above, although dairy is the biggest category in packaged food, it is not among the top five fastest growing categories in the packaged food industry. On the other hand, the edible oils category in emerging markets represents 40.230.200 tonnes and has an expected growth rate of 6% annually, doubling the industry average of 3% in the same markets.
Using omnichannel strategies
After reviewing some quantitative data we can also include some trends analysis. According to a recent blog post written by Euromonitor’s Head of Global Retailing, Michelle Grant, e-commerce provides excellent opportunities for future growth in developed and emerging countries.
“There’s also been a dramatic shift in consumer behavior in the past three years. According to Euromonitor International’s Global Consumer Trends Survey, 25% of Americans shopped for groceries online at least once in 2013. The percentage increased to 38% in 2016.”
In the SWOT analysis, threats are the negative external aspects to the company. Normally they can be related to market conditions or economic situations. For example:
Slow global growth in the packaged food market:
In a recent Euromonitor article titled, “Finding Pockets of Growth in the Global Food Market”, we see an overall revision of the packaged food industry. The growth rates of the different categories remain low (single digit growth rates) and in some cases even decreasing market sizes. According to global Head of Packaged Food, Lamine Lahouasnia, “The global food industry only grew by 1.1% in 2016, its lowest level in over a decade”.
In this type of environment, it is important to companies to look for growth opportunities. Smaller gains mean less room for outside companies to win market share, as most well-established brands use their market dominance to diversify their portfolio.
Increasing uncertainty keeps impacting developed markets.
Trump’s trade wars and tax breaks, China’s economic slowdown, possible hard landing Brexit scenarios and elections all over the EU are increasing the amount of uncertainty in the developed world markets.
This uncertainty will impact the possibility for industry growth or decline in the next five years. For example, a pessimistic scenario indicates that the total volume of packaged food sold in developed markets from 2016-2021 could decrease as much as a 0.3% compounded annual growth rate (CAGR) yearly.
Source: Euromonitor’s Packaged Food Industry Forecast Model
Filling the template and using the SWOT
After identifying all the elements to fill in the SWOT, use the template and work on a clean final version. Remember that the SWOT is strategy tool; keep and share your final version with your peers. Ask your team what strategies can be implemented to maximize opportunities and minimized threats based in what you find in the analysis.
Euromonitor International’s research identifies opportunities or threats in your industry or market, allowing you to create a more robust SWOT analysis. To learn more about Euromonitor International’s research tools and how we can help you with your business strategy, contact us.