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Power ofSWOT

Introduction¡ SWOT Analysis is a strategicplanning tool used to evaluatethe:¡ Strengths,¡ Weaknesses,¡ Opportunities,¡ Threats

History of SWOT Analysis¡ early 1950s¡ Developed at Stanford¡ Funded by Fortune 500companies¡ Took 9 years to develop¡ Involved 5000interviews

SWOT AnalysisSWOT analysis is the first stage of planning and helps marketers tofocus on key issues.Sinternal SWOT factorsOWexternal SWOT factorsTurn weaknesses into strengths,threats into opportunities.Then finally, SWOT will givemanagers options to matchinternal strengths with externalopportunities.T

SWOT AnalysisThe main purpose of SWOT analysis has to be to add value to our products and services sothat we can recruit new customers, retain loyal customers, and extend products andservices to customer segments over the long-term.

SWOT AnalysisSimple rules for successful SWOT analysis. Be realistic about the strengths and weaknesses of yourorganization when conducting SWOT analysis. SWOT analysis should distinguish between where yourorganization is today, and where it could be in the future. SWOT should always be specific. Avoid grey areas. Always apply SWOT in relation to your competition i.e. betterthan or worse than your competition. Keep your SWOT short and simple. Avoid complexity and overanalysis

Creative Use of SWOTs¡ How can we Use each Strength?¡ How can we Stop each Weakness?¡ How can we use each Opportunity?¡ How can we Defend against each Threat?

Matching strengths to opportunitiesOtherwise known as:S-O or Maxi-MaxistrategyUsing a strength tomaximise an opportunity

Matching weakness to opportunitiesOtherwiseknownas:W- ‐OorMini- rtunity

Matching strengths to threatsOtherwiseknownas:S- ‐TorMaxi- ‐MinistrategyMinimisingathreatwithastrength

Matching weakness to threatsOtherwiseknownas:W- ‐TorMini- e@me(oBenlastchoice)

POWER your SWOTE Emphasize detail.Detail, reasoning and justification areoften omitted from the SWOT analysis.What one tends to find is that theanalysis contains lists of single words.

POWER your SWOTW Weighting.Too often elements of a SWOT analysisare not weighted. Naturally somepoints will be more controversial thanothers. So weight the factors. One waywould be to use percentages e.g.Threat A 10%, Threat B 70%, andThreat C 20% (they total 100%).entry-content

POWER your SWOTR Rank and prioritize.Once detail has been added, andfactors have been reviewed forweighting, you can then progress togive the SWOT analysis some strategicmeaning i.e. you can begin to selectthose factors that will most greatlyinfluence your marketing strategyalbeit a mix of strengths, weaknesses,opportunities and threats.

POWER your SWOTP Personal experience.How do you the marketing manger fitin relation with the SWOT analysis? Youbring your experiences, skills,knowledge, attitudes and beliefs to theaudit. Your perception or simple gutfeeling will impact the SWOT.

POWER your SWOTO Order – strengths or weaknesses,opportunities or threats.Often marketing managers willinadvertently reverse opportunities andstrengths, and threats and weaknesses.This is because the line betweeninternal strengths and weaknesses, andexternal opportunities and threats issometimes difficult to spot. Forexample, in relation to global warmingand climate change, one couldmistake environmentalism as a threatrather than a potential opportunity.

Strategic ModelWhat we want to beWhy we existVisionMissionWhat we believe inValuesour game planStrategyWhat we need to doImplementation & FocusWhat I need to doStrategic InitiativesEverything BalancedPersonal ObjectivesStrategic OutcomesHow do wedevelop ourStrategy!

A strength can be a competitiveadvantage like u Believeinyourselfu Posi@veAHtudeu Focusu Intelligenceu Abilitytolearnu TimeManagementu SenseofResponsibilityu SpecificGoalsu Passion&Determina@onu Cri@calThinkingAbilityu Suppor@ngEnvironmentu Etc

A weakness can be a disadvantageas u u u u u u u Procras@na@onPoorTimeManagementNon- s@tu@onComplexGoalsEtc

An opportunity can be v GoodIns@tu@onv Scholarshipsv GoodMentorv Internshipsv Jobsv Backupsv Etc

A threat can be v Hurdlesv HealthProblemsv NoJobsv Discouragementv BadEnvironmentv Maybefriendsv etc

Analysis-Example-

Analysis PepsiCo

Analysis PepsiCo

Analysis PepsiCoStrengthsBranding – One of PepsiCo’s top brands is of course Pepsi, one of the mostrecognized brands of the world,Ranking - ranked according to Interbrand. As of 2008 it ranked 26th amongsttop 100 global brands.Profit - Pepsi generates more than 15,000 million of annual sales.Others - Pepsi is joined in broad recognition by such PepsiCo brands as DietPepsi, Gatorade Mountain Dew, Thirst Quencher, Lay’s Potato Chips, LiptonTeas (PepsiCo/Unilever Partnership), Tropicana Beverages, Fritos Corn, TostitosTortilla Chips, Doritos Tortilla Chips, Aquafina Bottled Water, Cheetos CheeseFlavored Snacks, Quaker Foods and Snacks, Ruffles Potato Chips, Mirinda,Tostitos Tortilla Chips, and Sierra Mist.

Analysis PepsiCoWeaknessesOverdependence on Wal-Mart – Sales to Wal-Mart represent approximately 12% ofPepsiCo’s total net revenue. Wal-Mart is PepsiCo’s largest customer. As a resultPepsiCo’s fortunes are influenced by the business strategy of Wal-Mart specifically itsemphasis on private-label sales which produce a higher profit margin than nationalbrands. Wal-Mart’s low price themes put pressure on PepsiCo to hold down prices.Overdependence on US Markets – Despite its international presence, 52% of itsrevenues originate in the US. This concentration does leave PepsiCo somewhatvulnerable to the impact of changing economic conditions, and labor strikes. LargeUS customers could exploit PepsiCo’s lack of bargaining power and negativelyimpact its revenues.Low Productivity – In 2008 PepsiCo had approximately 198,000 employees. Itsrevenue per employee was 219,439, which was lower that its competitors. This mayindicate comparatively low productivity on the part of PepsiCo employees.Image Damage Due to Product Recall – Recently (2008) salmonella contaminationforced PepsiCo to pull Aunt Jemima pancake and waffle mix from retail shelves. Thisfollowed incidents of exploding Diet Pepsi cans in 2007. Such occurrences damagecompany image and reduce consumer confidence in PepsiCo products.

Analysis PepsiCoOpportunitiesBroadening of Product Base – PepsiCo is seeking to address one of its potentialweaknesses; dependency on US markets by acquiring Russia’s leading Juice Company,Lebedyansky, and V Wwater in the United Kingdom. It continues to broaden its productbase by introducing TrueNorth Nut Snacks and increasing its Lipton Tea venture withUnilever. These recent initiatives will enable PepsiCo to adjust to the changing lifestyles ofits consumers.International Expansion – PepsiCo is in the midst of making a 1, 000 million investment inChina, and a 500 million investment in India. Both initiatives are part of its expansion intointernational markets and a lessening of its dependence on US sales. In addition thecompany plans on major capital initiatives in Brazil and Mexico.Growing Savory Snack and Bottled Water market in US – PepsiCo is positioned well tocapitalize on the growing bottle water market which is projected to be worth over 24million by 2012. Products such as Aquafina, and Propel are well established products andin a position to ride the upward crest.PepsiCo products such as, Doritos tortilla chips,Cheetos cheese flavored snacks, Tostitos tortilla chips, Fritos corn chips, Ruffles potatochips, Sun Chips multigrain snacks, Rold Gold pretzels, Santitas are also benefiting from agrowing savory snack market which is projected to grow as much as 27% by 2013,representing an increase of 28 million.

Analysis PepsiCoThreatsDecline in Carbonated Drink Sales – Soft drink sales are projected to decline by asmuch as 2.7% by 2012, down 63,459 million in value. PepsiCo is in the process ofdiversification, but is likely to feel the impact of the projected decline.Potential Negative Impact of Government Regulations – It is anticipated thatgovernment initiatives related to environmental, health and safety may have thepotential to negatively impact PepsiCo. For example, manufacturing, marketing,and distribution of food products may be altered as a result of state, federal or localdictates. Preliminary studies on acrylamide seem to suggest that it may causecancer in laboratory animals when consumed in significant amounts. If thecompany has to comply with a related regulation and add warning labels or placewarnings in certain locations where its products are sold, a negative impact mayresult for PepsiCo.Intense Competition – The Coca-Cola Company is PepsiCo’s primary competitors.But others include Nestlé, Groupe Danone and Kraft Foods. Intense competitionmay influence pricing, advertising, sales promotion initiatives undertaken byPepsiCo. Resently Coca-Cola passed PepsiCo in Juice sales.

Analysis PepsiCoThreatsPotential Disruption Due to Labor Unrest – Based upon recent history, PepsiCo maybe vulnerable to strikes and other labor disputes. In 2008 a strike in India shut downproduction for nearly an entire month. This disrupted both manufacturing anddistribution.PepsiCo is a world leader in convenient snacks, foods and beverages with revenuesof more than 43 billion and over 198,000 employees. Take a journey through ourpast and see the key milestones that define PepsiCo.Diversification – PepsiCo’s diversification is obvious in that the fact that each of itstop 18 brands generates annual sales of over 1,000 million. PepsiCo’s arsenal alsoincludes ready-to-drink teas, juice drinks, bottled water, as well as breakfast cereals,cakes and cake mixes.This broad product base plus a multi-channel distributionsystem serve to help insulate PepsiCo from shifting business climates.Distribution – The company delivers its products directly from manufacturing plantsand warehouses to customer warehouses and retail stores. This is part of a threepronged approach which also includes employees making direct store deliveries ofsnacks and beverages and the use of third party distribution services

SWOT analysis is the first stage of planning and helps marketers to focus on key issues. S W O T internal SWOT factors external SWOT factors . Intense Competition - The Coca-Cola Company is PepsiCo's primary competitors. But others include Nestlé, Groupe Danone and Kraft Foods. Intense competition may influence pricing, advertising .