The SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis has been a useful basic frame work for strategic planning and organizational performance management. This study will discuss the two internal components of SWOT analysis method; the Strengths and Weaknesses.
The study will focus on using the traditional SWOT analysis method to conduct an internal analysis for an IT System Integrator company operating in Egypt. A brief about the Information Technology (IT) market revolution in Egypt will be mentioned to provide background information that can be useful for a better evaluation of strength and weakness points.
II.Information Technology Revolution in Egypt
Revolutionary advances in Information & Communications Technologies (ICT) have been transforming the world economy and presenting new challenges to all countries during the last ten years. The main challenge was to compete effectively in an emerging information-based economy where both communications and computing play a key role in almost all industries.
Egypt is no exception from other countries. The Egyptian Government has believed that a strong ICT sector is a key contributor in reforming the economy, growing the exports, reducing the unemployment and modernizing the education. As a result, the government has placed the ICT development as a national priority.
The formation of a new Ministry of Communications & Information Technology (MCIT) in October 1999 marked as a start of a new era for Egypt’s telecommunications and information-technology sector. The revived ICT environment was supported by a new regulatory body and a more liberalized frame work.
Starting year 2000, a potential growth in the Egyptian CIT sector has been obviously noticed. In year 2000 the Egyptian IT market accounted for $730 million, increasing by a rate of 17.1 percent from 1999 and by 33 percent from 1998.
It was during such healthy and promising environment that CompanyX was born, to act as a networking and Data Communications System Integrator and Solutions Provider. The company’s mission was to provide its customers by optimum IT solutions to help them achieving a world class competitive edge. Not just technology but “Technology the way they need it!” as its slogan said.
Although the CIT market was emerging due to the government’s support as well ad many other external environmental parameters, it was very important for CompanyX to define a long term vision for the future, such strategic vision was essential to keep the company competitive in a fast growing market that is characterized by almost the highest new entrants rate among other industries (about 387% from year 2000 to July 2006 in Free Zones only) .
Despite the fact that the hardware industry was representing the highest market share in the Egyptian IT market, CompanyX’s founders have decided to target the data communications equipment sub-sector which was the smallest sub-sector representing only 10 percent of the IT market.
To achieve a competitive edge it was necessary for CompanyX’s management to keep an ongoing careful analysis of the strengths and weaknesses points of their organization.
SWOT analysis, or sometimes known as the TOWS Matrix, as a strategic planning tool, is used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture or in any other situation of an organization or individual requiring a decision in pursuit of an objective. This strategic planning tool involves monitoring the business environment internal and external to the organization. The technique is credited to Albert Humphrey, who led a research project at Stanford Research Institute in Stanford University in the 1960s and 1970s using data from the Fortune 500 companies.
SWOT analysis is part of the Harvard Policy Model, which has been developed as part of the business policy courses taught at the Harvard Business...