Monday, December 19, 2011
Strategic Analysis Tools
The last unit focused on organizational strategy. A variety of strategies were looked at. As well, tools for analyzing the paths (strategies) different organizations take were presented and applied. SWOT, PEST +C, BCG and Porters 5 Forces were all offered to the class as ways to assess an organizations strategy. Whats tool do you find the most useful or assessible? Why? Give an example of its usefulness by looking at an organization or organizations and assess its strategy or current position using the tool. Do not do a full analysis, but rather three or four points that show you understand the tool and the analyzed organization(s).
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BCG to make decisions about products, most useful because everything about the SWOT and PEST+C materializes in the performance of the products/services, and then the BCG is a final step to determine future of product/company.
ReplyDeleteUseful for Sony to see where they should invest capital in the coming years and where they should cut losses. Playstation is star because of high investment and high return, but their phones can be cut because they are not turning enough profit based on the amount invested into them. The technology for the phones can be sold to make sure that aspect of the company ends with profit, and the money from cash cows (Software or TVs) can be invested into the question marks (Computers, Tablets) to turn them into stars
In my opinion SWOT is an important tool because it states the strengths, weakness's, opportunities and threats. If a company knows this information then they can improve on their business. Knowing the strengths of the company is positive because teh company knows what they are doing right and if they things start to turn around they can quickly fix them. Weakness's allow room for improvement in the company. IF a company is really weak in an important area then they can do everything they can to fix the problem. Tim Hortons strengths are their coffee, so they know that they can never get rid of it. However they can improve it by offering different types of coffee. A weakness for Tim Hortons was lunch time so they created lasagna to attract more customers. Threats to Tim Hortins is that starbucks and second cup offer more expensive cafe drinks, so Tim Hortins brought out lattes. This way they can beat their competition.
ReplyDelete- Heather Harris
The BCG Matrix is the most useful tool because organizations can acknowledge what products or services are doing successfully or unsuccessfully in a company. If the product is becoming a dog, then the organization can innovate or eliminate the product. If a product or service is a question mark, they can eventually see whether it will become successful or become a failure. An example would be McDonald's French Fries. They are a cash cow. They don't need to be changed and they make a lot of money. So McDonald's can focus their attention to a dog. Which would be ice cream cones. Since they know ice cream cones are not making money, then a good plan for McDonald's would be to innovate.
ReplyDeleteBased upon the last lesson taught in class, the organizational strategy that I thought was the most useful tool to asses an organization's success is the SWOT Analysis. This strategy most useful because it evaluates the organization's strengths and opportunities that make them the lead competitor, as well as comparing their weaknesses and threats.
ReplyDeleteOrganization: Subway
Strategy: SWOT
Analysis:
-Strength: health and wellness branding through nutritional food/products
-Weaknesses:lack of customer interaction due to the process of making subs when stores become extremely busy. Orders can easily be mixed up,forcing the customer to start the order from, the start of the line (bread, meat, veggies, then sauce)
-Opportunities:people are becoming more health conscious, larger market will be available
-Threats: indirect competition (Tim Horton, McDonald) are staring to sell similar products for cheaper price
BCG is the most useful because you are able to categorize the organizations by success and failure. Organizations can also categorize their subsidiaries in this manner. This allows them to focus their attention on products/subsidiaries that are not doing well or products that have not yet reached their full potential.
ReplyDeleteFor example, Apple's BCG would be:
Star- iPhone 4S
The iPhone 4S is the most successful product that Apple has created and it has just been released within the past couple of months. Apple is innovating their products frequently.
Dog- iPod nano
the iPod generation has halted. Because of the iPhone releases consumers are more likely to purchase those as opposed to iPhone nano's because they have the same ability as the iPod touch, which is much more popular than the iPod nano. Apple should either innovate this product or discontinue it completely in order to focus their ideas for new products and innovating their star products, such as the iPhone 4S.
I find the SWOT Analysis the most useful tool because it focuses on negative(Weaknesses and Threats) and positive(Strengths and Opportunities)traits of an organization. It brings awareness to the organization on what they are doing well in and what needs improvement. It also shows the organization things that they can not control which would be the external factors such as opportunities and threats.
ReplyDeleteSWOT Analysis of Indigo's:
Strength:
- Supporting a new market (E-readers and E-books
Weakness:
-Running out of stock (Customers have to order books and wait for them to come in to the store)
Opportunity:
-New Technology (E-readers & E-books)
Threat:
-Competition that has already accepted new technology (Amazon with their E-readers and e-books)
I find the SWOT analysis the most useful as it helps organizations realize the possessions/potential that they have. Doing a proper analysis will provide the organization with a structured view of their strengths, weaknesses, opportunities, and threats. This is very useful as it allows them to see what they need to work on (fix weaknesses) as well as take advantage of opportunities. They can also develop a plan to minimize the affects of threats or completely stop the threats from effecting the organization. Another useful part of the SWOT analysis would be the fact that it includes both internal and external values. Strengths & Weaknesses (INTERNAL)
ReplyDeleteOpportunities & Threats (EXTERNAL)
BASIC SWOT ANALYSIS - TIM HORTONS
Strengths/Weaknesses - controllable things like quick/efficient service, reputable brand, good pricing or unreliable employees, unclean restaurant
Opportunities/Threats - Sometimes uncontrollable things like a new product release, chance to expand into new market (ex. dinner food items) or losing market share to Starbucks/Second Cup, new competitor opening a store close to yours, etc.
Companies/organizations can do a more in-depth version of the SWOT analysis and then develop a strategic plan for the future, making this tool very useful to every kind of organization.
The tool that I find the most usable is PEST+C. This tool looks at external factors which shape the way that the organization operates. For instance, political factors mostly influence international business since different laws and regulations must be followed in every country (ex. bribery is encouraged in some countries [underdeveloped] while it is illegal and companies can get fined in other countries.
ReplyDeleteGoogle's example of PEST+C
Politics
-Currently U.S.Congress is trying to establish a law in which search engines must filter sites that contain pirated music, movies, etc.
-The government in China shut down Google because the company did not want to cooperate with government rules and regulations (filtering certain websites)
Economics
-How far Google wants to expand, considering the fact that the public does not have access to computers in underdeveloped countries.
In my opinion I believe that the SWOT analysis would be the most useful at finding an organizations current position. I like the SWOT analysis because it looks at both internal and external things about the organization. Another reason why I find it useful is because you can look at the strengths and weakness and see what the organization has to do/continue to do. The opportunities show you what direction the organization is heading towards, and threats show you what the organization has to do to avoid certain things from happening.
ReplyDeleteSWOT analysis example for STARBUCKS
S- Global coffee brand built upon a reputation for excellent products and services.
W- Reputation for new product development and creativity, but thinks their innovations with falter over time.
O-New products and services that can be retailed
T- Possible that market for coffee will grow, or be replaced by another type of beverage or leisure activity.
By this SWOT analysis you can see that Starbucks has a very good reputation, and they are willing to offer new products that can be retailed. But it is possible for Starbucks to run out of innovations, or even worse they may be replaced by another type of beverage. They can avoid this problem by coming up with innovations totally different from what they already supply and what the competition is coming up with.
The tool that I find the most effective is the SWOT Analysis because it analyzes all aspects of an organization. It deals with both the internal and external areas of an organization, which gives a fuller picture. For example, with PEST + C, only external factors are analyzed. However, SWOT shows not only what opportunities that could arise and threats that could be faced, but also what’s good (strengths) and what’s bad (weaknesses) within the business. This fuller pictures aids in decision making because the organization has more information. For example, instead of just knowing what to take advantage of (opportunities) and what to avoid (threats), the organization knows what to continue doing (strengths) and what to stop doing (weaknesses).
ReplyDeleteFor example, by using a SWOT Analysis, Google knows that it needs to take action not only due to external factors, but also because of internal factors. With PEST + C, Google would just know that there are new advertising networks entering the market (threat) and that search traffic will increase because of the upcoming holiday season (opportunity). On the other hand, with the BCG Matrix, Google would just that Orkut is a dog (weakness) and that its search engine is a star (strength). However, by using a SWOT Analysis, Google has information from both tools.
-Dragan Erak
ReplyDeleteI believe that the SWOT analysis was the most useful tool out of all the organizational strategies we learned throughout the unit because it gave the best explanation of an organization. It showed the organization’s internal strengths and weaknesses, which are the ones the manager can control and what it going on in the outside world and how that company relates to it. So, it gives the general summary of what and how the company is doing and what it can do to improve itself.
For example, a quick SWOT analysis of Microsoft would be:
Strengths: good market share in the gaming industry and a large market share in the document industry, also they are constantly making new products and innovating their old ones, they have a gigantic R&D budget
Weaknesses: Some of their new products are not doing well, yet they are still putting money into them
Opportunities: they are always buying out competitors to eliminate competition, they are using various growth strategies
Threats: Microsoft’s competitors are making office technology, economy is low so some people might not have enough money for Microsoft’s more expensive and popular products
I think that the SWOT analysis is the most useful tool to analyse an organization. The SWOT analysis encompasses all of the key ideas that an organization needs to work with to be successful. The strengths of a company show what the company is doing well, and also shows the products that are doing well, which covers the BCG matrix. The weaknesses shows what the company should acknowledge and try to fix. It will also show the products that are not being successful, also covering the BCG matrix.
ReplyDeleteThe opportunities part of the analysis shows what the company can capitalize on that it outside of the organization's control. Such as having a competitor fold, making your organization the leader. Also, if your industry is hard to enter, that could be considered an opportunity as well. This covers Porter's 5 forces.
The Threats are what the organization cannot control, but may hurt them. With the PEST+C analysis, the organization sees what threats it has coming towards it, such as government regulations, and how strong the economy is doing.
Though all are useful tools, each tool falls into one of the SWOT categories. Strengths would be the Stars, and Cash Cows of the organization as well as additional information involving the financial status of the organization. Weaknesses would have the Dogs and Question Marks of the BCG matrix. Along with that, it would have information on other weaknesses that need to be addressed for them to move forward. The Opportunities and Threats are both found both in the PEST+C analysis and Porter's 5 forces. Both of them show what the organization cannot control. The threats and opportunities also have information involving trends, which both of the others don't go into.
Though all of the tools are useful, they can all be used as a separate part of the SWOT analysis tool.
Using SWOT to analyze Microsoft, the Strengths will show it’s best products, which are Office, and Windows (The Star and Cash Cow of the BCG matrix). It also will show that a strength is that large amount of market share the company has in many different industries it has ventured into. It will also show that it is a strong company because of it’s scale. This not only shows what the BCG matrix would have shown, but also expands into more.
The weaknesses would be the Dogs and Question Marks of the matrix, which are the Windows Phone, and Bing. Here the Matrix stops, but the SWOT does not. It goes into how the company is weak as a whole rather than just looking at individual products. For Microsoft, it would show the amount of large companies that they are working against, such as Apple, Google, Nintendo and Sony.
The opportunities for Microsoft, would show that they are being successful in their endeavors into different markets, and that new markets are opening up and that they can muscle their way into them quite easily. IT would also show how the markets that Microsoft already dominate would be hard to take away from them (Using Porter’s 5 forces)
The Threats would be their competition coming out with new technology that is better than Microsoft’s. Also, since Microsoft is very close to a monopoly in their Word processing, and OS markets, they can’t expand there, making them have to focus elsewhere.
I find SWOT analysis to be most useful for an organization strategy because it picks out the major pros and cons about the company. By having a strong SWOT analysis the organization is more likely to reach their long term goal. Changing weaknesses into strength only make the company better. You cannot do this with PEST+C. SWOT is also good when dealing with comparison. The organization can compare their strengths and weaknesses to other organizations and analyze where they dominate and where they lack
ReplyDeleteStrength- The strength is internal, this means the company can control over what they are doing well in and can improve whatever is nessasary
Example – NIKE -- Strong Market share
Weakness—The weakness is also internal, this means whatever the company is doing poorly in they can improve and innovate. The organization has the power to change this a good company will pick out the weaknesses and make them a strength.
Example—NIKE – Products made in 3rd world countries
Opportunity—Opportunity is external witch means the company has no control over what happens to them. This is a great way for a company to take advantage and get a competitive advantage over their competitors.
Example- NIKE – New Technology
Threats- Threats is also external. The organization has no control over what happens but should also be aware of any threats that come their way
Example- NIKE- Competition
I think the analysis tool that i found the most useful or beneficial was definitely the SWOT analysis. The SWOT analysis is the most beneficial because the other analysis tools only look internal or external, the SWOT analysis does both. The SWOT analysis is also the easiest tool for decision making purposes, it allows us to use our strengths to overcome our weaknesses and tells us to take opportunities and avoid threats. As an example we can analyse Carlos pizza because it is a local company.
ReplyDeleteStrengths
-Many loyal customers
-little to no advertising costs
Weaknesses
-small restaurant with little buyer power
-limited customer base
Opportunities
-Nearby High school, which provides most of
their customers, is now only offering health
food
Threats
-Little Ceasers pizza opened only ten minutes
away