SWOT analysis using MindDecider's decision making tools

Generally, SWOT analysis is a tool for evaluation of a company and its environment. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are internal factors, showing competitive advantages or capabilities of a company that are within its control. Opportunities and threats are external and identify the influence of market trends, economic, social, politic and other factors.

SWOT analysis is often combined with PEST (Political, Economic, Social and Technological factors) for better understanding of external influence and potentials.

The purpose of SWOT analysis is to highlight, analyze, and evaluate company's position and identify its strategic directions. It can be performed not only on a company but also on a product, service, group of companies and institutions, individual or a specific territory (see Global Competitiveness Index subject area).

Currently, the marketing media community offers tons of articles and books on features of SWOT analysis. The variety of approaches and opinions can baffle any marketing specialist and lead to improper results. That is why the majority of companies tend to develop their own marketing strategies following general rules of SWOT analysis.

In this article we will try to identify the most popular and descriptive factors of SWOT and then integrate them into one MindDecider project. The advantage of such an approach is that the factors can be added, removed or altered in mere seconds. Another benefit - the software allows to numerically estimate the strength of each factor so that decision makers could see which group is more influential: strengths or weaknesses, opportunities or threats and then define which factor gives the largest contribution to the final rate.

Internal factors

1. Human resources (staff): skills and experience of top/middle management and production workers, education level of staff and regular trainings, collaboration between company's employees, costs of labour, motivation of a personnel to better performance and increased productivity, staff turnover rate.
2. Products / Services: competitive features of a product/service, its quality, extra services related to a product (guarantee service, free installation, etc), delivery term and quality, technological innovations used in production processes, pricing options offered to customers.
3. Company-related: time on market, sales trends, company's reputation and image, brand perception, location (in terms of proximity to local markets, distribution channels, development of infrastructure and communications), resource base (price and quality of resources, proximity to resource supply), government support, quality of suppliers, flexibility and responsiveness to market changes, profitability rates, company's expansion potential.

External factors

1. Market environment: level and intensity of competition (number of competitors, their scale, recognition and experience on market), market trends (growth of customers, companies, sales, etc), innovations by competitors (whether the competitors produce or sell traditional or hi-tech modern products or services), market entry barriers (control of resources, large initial investments, law-balling, government policy, etc).
2. Economic factors: inflation rate, income growth, general taxation burden and taxes imposed on target product/service category, exchange rate, trade barriers (for international traders), access to loans (availability and costs of bank credits), unemployment rate, influence of weather or seasonality.
3. Social factors: demographic trends (population growth), lifestyle trends, consumer attitudes, ethnic/religious influence, media market development, age distribution (percentage of audience with target age interval), healthcare protection (development of healthcare services), education level, labour mobility, social legislation and government support.
4. Technological factors: IT development, technology transfer, legislation (laws and directions on technology processes, intellectual property protection, patenting, licensing, etc), communication sector growth (broadband internet coverage, LAN networks, cellphone users).
5. Political factors: environment policy (emission standards, location requirements), legislation trends (changes in general financial, social, business legislation and its effectiveness), competition regulation (antimonopoly policy), political stability, trade regulation (protectionism or free trading, customs procedures and burden), current or potential wars and conflicts.

How to use MindDecider for SWOT analysis?

Each factor, whether external or internal, can have two interpretations: positive or negative. If a factor is positive it is referred to strengths or opportunities. Similarly, negative interpretation is marked as a weakness or a threat.

Examples:

• collaboration: effective collaboration between employees and top management (positive, strength); each staff member acts independently and cannot or is not willing to share ideas with others (negative, weakness).
• flexibility: company is sensitive to market trends and regularly adjusts its marketing policy (positive, strength); the company is burdened with bureaucratic procedures that complicates updating and adjustment of marketing policy (negative, weakness).
• access to loans: banks offer various credit options with affordable rates and terms (positive, opportunity); few banks offer limited credits with high interest rates (negative, threat).
• legislation trends: current laws are effective and continue to improve legal framework of the country (positive, opportunity), current legislation in generally ineffective and imposes extra costs on conduct of business (negative, threat).

All above-mentioned factors are entered into MindDecider project (download SWOT.mdp). Items represent SWOT quadrants grouped into 2 categories: internal (strengths and weaknesses) and external (opportunities and threats).

The following actions may be taken with this project:

- re-estimation of the defined set of factors according to specific situation in company and the country of business. Note, that if you a high estimate to strength/opportunity, then the estimate for weakness/threat should be zero or very low.

-adding factors that better describe company's environment with their further estimation or deleting irrelevant ones.

The software will show which group is more influential (strengths or weaknesses, opportunities or threats). Report mode (F8) will provide a detailed statistics on dominant factors inside the group.

- invite colleagues or experts to teamwork

- view a Tornado diagram to identify the ranges of factor change.

MindDecider's analytic tools offer sufficient information to develop a reasonable marketing strategy and achieve both short-term and long-term goals.