SWOT Analysis Entrepreneurship

Assignment # 1

(Entrepreneurship)

Naveed Ahmed (BSEE13035)

Instructor

Mr. Nabeel Qadeer

(Electrical Engineering Department)

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Assignment Statement

SWOT analysis

Porter's 5 forces

PEST analysis (NOT PESTEL)

Value Chain Analysis

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Conduct a research on following analysis

SWOT Analysis

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What is meant by SWOT? “SWOT” represent following four factors;

S stands for what things are Satisfactory for

organization at present.

W means what are weakness in the organization that

can become source of hindrance in the performance

of organization.

O denotes what Opportunities can be explored in the

future,

T means Threats that could surface in the future

Finally, SWOT analysis is a method by which the

organization’s management do analysis about strengths,

weaknesses, opportunities and threats that can affect

performance of organization.

SWOT Analysis

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History & Creation of Swat Model

No, doubt! each organization wants to improve its

performance and increase revenue. It is a challenge for

organization . They use different methods like analysis,

examinations and evaluation methods etc.

to do this.

“SWOT” Model is a source to fulfill challenge. Developed by “Albert Humphrey” at the Stanford University

Albert S. Humphrey was an American business and

management consultant who specialized in organizational

management and cultural change. [1]

SWOT became a analytical tool to find right strategy for

successful development of organization.

1- https://rapidbi.com/swotanalysis/#.Vo0mLvl97IU

SWOT Analysis

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Purpose of Model

Analyze Internal Factors

Strengths or weakness and their impact on company’s

objectives.

Analyze External Factors

Make improvements in product/service by viewing

macroeconomic matters, technological change,

and socio-cultural changes, as well as changes in the

marketplace or competitive position.

http://www.free-management-ebooks.com/dldebk-pdf/fme-swot-analysis.pdf

SWOT Analysis

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Advantages

Problem Domain

SWOT analysis can be applied to an organization,

organizational unit, individual or team.

Universal Application

Same analysis is used to support strategic planning,

opportunity analysis, competitive analysis, business

development or product development processes.

Simplicity

SWOT analysis requires neither technical skills nor

training.

SWOT Analysis - Idea, Methodology and a Practical Approach; Nadine Pahl and Anne Richter

SWOT Analysis

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Limitations of Model SWOT model can generates too many ideas but can not

help you choose which one is best

SWOT model can produce a lot of information, but not all

of it is useful.

http://preview.tinyurl.com/zj4ojhx

SWOT Analysis

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Utility of SWOT

Set objectives: what are intentions of organizations?

Environmental Analysis: Assessment of performance of

employee.

Product evaluation: Assessment of product.

Competitor evaluation

Preparation: Implementation of new strategies.

Monitoring results, mapping against plans and taking

corrective actions.

References:

1- Book named as “The SWOT Analysis”

Written by Anja Bohm

Image Reference:

2-http://tinyurl.com/h4cz5gt

Porter's 5 forces

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Porter’s Five Forces

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What are Porter Five Forces

Poster 5 forces include Barrier to new entrance

Threat of substitute

Suppliers Power

Buyers Power

Competitors

Source: http://www.kstoolkit.org/Porter%27s+Five+Forces+Analysis

Source: Boundless. “Porter's Five Forces.” Boundless Management. Boundless, 21 Jul. 2015.

Retrieved 05 Jan. 2016


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History & Creation of Porter’s Five Forces

Michael E. Porter introduced concepts of five forces during

working for the Harvard Business School and the Boston

Consulting group. Their work was about establish strategies

about competitors in market. They applied macroeconomics

principles and business strategies to develop these forces.

Developed as reaction to SWOT analysis

Linked with the value chain and other generic strategies

developed by porter

Based on structure conduct performance system in industrial

organization system

Applied to diverse range of problems.

Source: World Report Fall 2006: The Value Chain Approach; Strengthening Value Chains to Promote Economic

Opportunities. Available at: http://www.acdivoca.org/852571DC00681414/ ID/resources_worldreportfall06


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Purpose of Model

What is industry structure and its competition level?

Industry can find out its strength and position in market and

can produce ability to sustain profit by identifying these forces

Maximize profit

Compete with rival

How to make strategies to hinder your customer to shift from

your product to your competitor's product.


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Advantages

Maximize Revenue

By applying this analysis we can increase profit of

industry.

Competition Analysis

We can affect competition of market just understanding

five forces.

Macro-Economics Analysis

You can analyze market at macro level.


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Limitations of Model

Time Expensive

Analyzing all five forces in complicated industries

requires too much time and resources to be practical.

No Information About Joined or Partnership Business

The model also does not consider that companies may

work together in alliances, pooling information and

other resources.

Porter made the assumption when designing his model

that markets would stay fairly stable, not taking into

account technological advances or increasing competition

from international market entrants.

Source: http://preview.tinyurl.com/ha2ura5


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Utility

It helps us to analyze our current industrial strength in market

and our competitor strength in market.

It also helps us to strengthen out position in market.

It can also be used in following type analysis;

Statistical Analysis

Dynamical Analysis

Analysis of Option

With proper understanding of porter forces we can take fair

advantage of strengthen portion of industry and can more

focus on its weak point to make progress.

Source: Article Named “Porter’s Five Forces Analysis” by Bilal Ahmed

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Difference between SWOT and

Porter’s Five Forces Analyses

From whole above discussion I found some difference;

The major distinction is that Porter's five forces are used to

analyze the competitive environment within an industry, often

focusing on external forces,

SWOT analysis tends to look more deeply within an

organization to analyze its internal potential.

Porter's five forces are also generally more of a micro tool,

while SWOT analysis is comparatively macro.

PEST Analysis

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PEST Analysis

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PEST Analysis Define A PEST analysis is an analysis of the external

macro-environment that affects all firms.

PEST is mnemonic of following four words that

major factors of macro-environment.

P = Political

E = Economical

S = Social

T = Technological

Source: https://www.mindtools.com/pages/article/newTMC_09.htm

Source: Boundless. “Porter's Five Forces.” Boundless Management. Boundless, 21 Jul.

2015. Retrieved 05 Jan. 2016

PEST Analysis

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History & Creation of PEST Analysis

Francis J. Aguilar a business environment analyzer introduced

concept of ‘ETPS’ in 1967

E = Economic

T = Technological

P = Political

S = Social

Later on Arnold Brown for the Institute of Life Insurance

arranged it ‘STEP’ (Strategic Trend Evaluation Process).

In 1980 some other authors organized it as “PEST”.

Source: http://pestleanalysis.com/what-is-pestle-analysis/

PEST Analysis

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Purpose of Model

It is very important model because it deals with macro-

environment that is not in our control

Its purpose is to aware organization to about following things;

What will be effect on performance of organization if

government impose tax on raw material or import or

export of raw material etc?

What will be effect on performance of organization if

economical condition of country changes .(i.e. inflation

increases) in such case what an organization will have to

do to handle situation).

No doubt! These factors are not in our control we have 0%

control on it but we can take proper step to reduce failure rate

etc. And this is possible because of PEST analysis.

To make strategies in case of ups and downs in macro-

environment.

PEST Analysis

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Advantages

It helps you to spot business or personal opportunities,

and it gives you advanced warning of significant threats.

It reveals the direction of change within your business

environment. This helps you shape what you're doing, so

that you work with change, rather than against it.

It helps you avoid starting projects that are likely to fail,

for reasons beyond your control.

It can help you break free of unconscious assumptions

when you enter a new country, region, or market; because

it helps you develop an objective view of this new

environment.

PEST Analysis

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Uncertainty

.The external factors considering during PEST

analysis are dynamic. They can vary at any time.

There is not any exact time for their changes. There

always exist some uncertainty.

Time And Cost Expensive

To do analysis we need a lots of data. To collect a lot

data we need a lot sources. In addition to this we also

have to contact external institutes for getting

information. That’s why it is a time and cost expensive

Source: http://preview.tinyurl.com/ha2ura5

PEST Analysis

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Utility

It helps us to analyze macro-environment.

We can use it to make strategies to overcome loss of industry

due to effect on performance of organization due to effect of

political interference, economical declination, technological

improvements or any sociological problem.

Produce new opportunities.

For example, opportunities come by introducing new

technology.

Souirce: http://www.free-management-ebooks.com/faqst/pestle-09.htm


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Introduction

A tool to find out how you can produce great

possible value for the customer

It is three step process

Activity Analysis

Which activity your are gong to do. (i.e.

which thing you are going to make)

Value Analysis:

Find out better way to produce great

value for your customer.

Planning

Working started



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History & Creation of Value Chain Analysis

Michael Porter introduced Value chain concept in1980s

Gereffi (1990s) Chains Concept

Linking households, enterprise with one another and

world economy.

Morvan (1985s)

Mesco-economy; interdependence; technologies change

along chain

Three main type analysis

Technical or Physical

Economical

Organizational



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Purpose of Model

To create great value for customer.

Achieving maximum process effectiveness.

Understand how a portion of the economic system works and

could better work.

To make better service and marketing services to improve

produce and customer relations.

Enhance Revenue and Profit

Globalization supply and product

Source: Cite Man: What are the benefits of value chain management?


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Advantages

To create or strengthen comparative advantage in

market

Increase overall profit

Company find outs it specific values in which that is

expert

Company looks way for more efficiencies.

Source: http://preview.tinyurl.com/j9pmayf


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Difficulties in finding data about costs, assets, and

revenues of the value chain activities.

Porter’s value chain model include its heavy orientation

towards the manufacturing business which makes it hard

for other types of business to understand.

Since the model is not easy to understand and is used

nowadays by its own experts, it is more likely that it will

face resistance from managers in its implementation.

Source: http://preview.tinyurl.com/guz5wck /


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Utility

Marketing

Increasing Customer Strength

Maximize Profit

Analysis of Competitor

Souirce: http://www.tutor2u.net/business/reference/value-chain-analysis

Career

SWOT Analysis Entrepreneurship