[pic][pic][pic][pic][pic][pic][pic][pic]Organizational strategies are the means through which companies accomplish their missions and goals. Successful strategies address [pic]four elements of the setting within which [pic]the company operates: (1) the company's strengths, (2) its weaknesses, (3) the opportunities in its competitive [pic]environment, and (4) the threats in its competitive [pic]environment. This set of four elements—strengths, weaknesses, [pic]opportunities, and threats—when used by a firm to gain competitive advantage, is often referred to as a SWOT analysis. SWOT was developed by Ken Andrews in the early 1970s. An assessment of strengths and weaknesses occurs as a part of [pic]organizational analysis; that is, it is an audit of the company's internal workings, which are relatively easier to control than outside factors. Conversely, examining [pic]opportunities and threats is a part of environmental analysis—the company must look outside of the organization to determine [pic]opportunities and threats, over which it has lesser control.
Andrews's original conception of the strategy model that preceded the SWOT asked four basic questions about a company and its [pic]environment: (1) What can we do? (2) What do we want to do? (3) What might we do? and (4) What do others expect us to do?
The answers to these questions provide the input for an effective strategic management process. While Andrews' original conception of this analysis has been developed and changed to the more streamlined [pic]SWOT analysis that we know today, his work is the foundation of this activity.
Strengths, Weaknesses,opportunities, and Threats
Strengths, in the [pic]SWOT analysis, are a company's capabilities and resources that allow it to engage in activities to generate economic value and perhaps [pic]competitive advantage. A company's strengths may be in its ability to create unique products, to provide high-level customer service, or to have a presence in multiple retail markets. Strengths may also be things such as the company's culture, its staffing and training, or the quality of its managers. Whatever capability [pic]a company has can be regarded as strength.
A company's weaknesses are a lack of resources or capabilities that can prevent it from generating economic value or gaining a [pic]competitive advantage if used to enact the company's strategy. There are many examples of organizational weaknesses. For example, a firm may have a large, bureaucratic structure that limits its ability to compete with smaller, more dynamic companies. Another weakness may occur if [pic]a company has higher labor costs than a competitor who can have similar productivity from a lower labor cost. The characteristics of an organization that can be strength, as listed above, can also be a weakness if the company does not do them well.
[pic]Opportunities provide the organization with a chance to improve its performance and its [pic]competitive advantage. Some [pic]opportunities may be anticipated, others arise unexpectedly. [pic]Opportunities may arise when there are niches for new products or services, or when these products and services can be offered at different times and in different locations. For instance, the increased use of the Internet has provided numerous [pic]opportunities for companies to expand their product sales.
Threats can be an individual, group, or organization outside [pic]the company that aims to reduce the level of the company's performance. Every company faces threats in its environment. Often the more successful companies have stronger threats, because there is a desire on the part of other companies to take some of that success for their own. Threats may come from new products or services from other companies that aim to take away a company's [pic]competitive advantage. Threats may also come from government regulation or even consumer groups.
A strong company strategy that shows how to...
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