Marketing

Here I am going to share how I analyze. First I will think about myself because I am the product to be sold to a company for a better salary and perks. Then about the competition, the other people who are going to compete for the same job. Then the industry, the industry in which the company you are applying is operating. When you are examining the industry, consider the entire industry as a single company and compare it with other industries like other companies.

I hope you all know that strengths and weaknesses are internal, that is they are under the control of you. Opportunities and threats are external, that is, you will not be able to control them.

In the second step, tabulate the strength, weakness, opportunity and threats for the company you are analyzing, here You are the company . First mark everything as general then separate them into different categories. Everybody will have different set of items.

COMPANY

(Here it is YOU)

STRENGTH

WEAKNESS

OPPORTUNITY

THREAT

COMPETITION

(Others competing with you)

STRENGTH

WEAKNESS

OPPORTUNITY

THREAT

INDUSTRY

(The industry in which the company you are applying is in)

STRENGTH

WEAKNESS

OPPORTUNITY

THREAT

Do not get frightened! Once the tables are made and classified into different categories, it becomes much easier to follow the next step, quantifying SWOT matrix.

Quantifying SWOT Matrix

The first step is to quantify the magnitude of each element within the matrix. Magnitude (M) refers to how strongly each element affects the firm. A simple method is to use a scale of 1 (low magnitude), 2 (medium magnitude), or 3 (high magnitude) for each strength and opportunity and -1 (low magnitude), -2 (medium magnitude), or- 3 (high magnitude) for each weakness and threat. The second step is to rate the importance (I) of each element to the firm using a scale of 1 (weak importance), 2 (average importance), or 3(major importance) for all elements in the matrix. That is how much importance your customers would assign to each element. The final step is to multiply the magnitude (M) ratings by the importance (I) ratings to create a total rating (R) for each element (R = M * I). Remember that the magnitude and important ratings should be heavily influenced by customer perceptions, not just the perceptions of the manager. Those elements with the highest total rating (positive or negative) should have the greatest influence in developing strategy.

(Ref: O.C. Ferrell and Michael D. Hartline, (2008), Marketing Strategy, 4th Ed, South Western Cengage Learning)

Steps to Quantifying SWOT Matrix

Step I

First perform the quantification for You.

Magnitude: Positive for strength and opportunity. Negative for weakness and threat. Importance: Positive for all.

Rating “R”: Positive for strength and opportunity. Negative for weakness and threat.

Once you have completed the “Quantifying SWOT Matrix” then add the “R” column for strength, weakness, opportunity and threat.

For the above matrix:

Strength = 22; Weakness = -18; Opportunity = 12; Threat = -16.

Now add strength and weakness: +22+(-18) = +4. This is your co-ordinate for X axis. Your X axis represents Weakness on the left and Strength on the right.

Then add opportunity and threat: +12+(-16) = -4. This is your co-ordinate for Y axis. Your Y axis represents Opportunity on top and Threat at the bottom.

OPPORTUNITY

THREAT

In this case, as you are having a Plus (in strength and weakness) and a Minus (in opportunity and threats), you are in the IV Quadrant. To move to the first quadrant, the quadrant where every manager wants her/his company to be, you have to minimize the external threats.

Step II

Then perform the quantification for the competitors.

Magnitude: Positive for strength and opportunity. Negative for weakness and threat. Importance: Positive for all.

Rating “R”: Positive for strength and opportunity. Negative for weakness and threat.

Once you have completed the “Quantifying SWOT Matrix” then add the “R” column for strength, weakness, opportunity and threat.

For the above matrix:

Strength = 11; Weakness = -21; Opportunity = 12; Threat = -16.

Important thing to note: Opportunity and threat are going to be the same for the firm and the competition; because both of them function in the same external environment.

Now add strength and weakness: +11+(-21) = -10. This is your co-ordinate for X axis.

Then add opportunity and threat: +12+(-16) = -4. This is your co-ordinate for Y axis.

In this case, as your competition is having a Minus and a Minus. Therefore, your competition is in the III Quadrant.

Steps after Quantifying SWOT Matrix

Step III

Then perform the quantification for the industry in which the company you are applying is in.

Magnitude: Positive for strength and opportunity. Negative for weakness and threat. Importance: Positive for all.

Rating “R”: Positive for strength and opportunity. Negative for weakness and threat.

Once you have completed the “Quantifying SWOT Matrix” then add the “R” column for strength, weakness, opportunity and threat.

For the above matrix:

Strength = 28; Weakness = -20; Opportunity = 12; Threat = -16.

Now add strength and weakness: +28+(-20) = +8. This is your co-ordinate for X axis. Your X axis represents Weakness on the left and Strength on the right.

Then add opportunity and threat: +12+(-16) = -4. This is your co-ordinate for Y axis. Your Y axis represents Opportunity on top and Threat at the bottom.

OPPORTUNITY

THREAT

In this case, as your industry has a Plus (in strength and weakness) and a Minus (in opportunity and threats), it is in the IV Quadrant. To move to the first quadrant, the quadrant where every industry wants to be, your industry must minimize the external threats.

Note here, your firm, your competition and your industry, all have the same external environment. Whereas the internal strength and weaknesses vary.

Start with your position:

OPPORTUNITY

Show your competition and industry:

OPPORTUNITY

THREAT

YOU HAVE TO FOLLOE THESE STEPS VERBATICALLY TO COMPLETE YOUR MARKETING PLAN.

1. If your competitor has a strength, which you do not have, then their strength becomes a threat and it weakens your firm. Therefore, add that competitor’s strength as another weakness in your final matrix.

2. If your competitor has a weakness, which you do not have, then their weakness becomes an opportunity and it and strengthens your firm. Therefore, add that competitor’s weakness as another strength in your final matrix.

3. If your industry has a strength, which you do not have, then their strength becomes a threat and it weakens your firm. Therefore, add that industry’s strength as another weakness in your final matrix.

4. If your industry has a weakness, which you do not have, then their weakness becomes an opportunity and it and strengthens your firm. Therefore, add that industry’s weakness as another strength in your final matrix.

In summary, once you have made the matrices, carefully compare strengths of your firm with the competition and the industry. Then compare the weaknesses. Remember, their strengths will become your threat and their weaknesses will become your opportunity.

Once we have done this, we are ready look at our CRITICAL ISSUES. Your critical issue CI is going to be your internal weakness plus external threats. CI = W +T. You must take the weakness and threat from the final integrated firm’s matrix.

Now tell me how you are going to eliminate your weaknesses. Take one by one and explain the weakness and how to eliminate it.

Then tell me how you are going to deal with the threats. Threats are external. Be careful in dealing with the threats. You may not be able to eliminate them; but, how you are going reduce the effects of those threats. Take one by one and explain the threats and how to deal with them.

Summarize the last two parts (weakness and threat) as YOUR recommendations.

Stop here. Your are done.

This is quadrant II. X axis minus and Y axis plus

This is quadrant I. X axis plus and Y axis plus.

This is quadrant III. X axis minus and Y axis minus. Your competition is here.

This is quadrant VI. X axis plus and Y axis minus

This quadrant II. X axis minus and Y axis plus

This quadrant I. X axis plus and Y axis plus.

This quadrant III. X axis minus and Y axis minus

This quadrant VI. X axis plus and Y axis minus. Your Industry is here

This quadrant II. X axis minus and Y axis plus

This quadrant I. X axis plus and Y axis plus.

This quadrant III. X axis minus and Y axis minus

This quadrant VI. X axis plus and Y axis minus. You are here

This is quadrant II. X axis minus and Y axis plus

This is quadrant I. X axis plus and Y axis plus.

This is quadrant III. X axis minus and Y axis minus. Your competition is here.

This is quadrant VI. X axis plus and Y axis minus

This quadrant II. X axis minus and Y axis plus

This quadrant I. X axis plus and Y axis plus.

This quadrant III. X axis minus and Y axis minus

This quadrant VI. X axis plus and Y axis minus. Your Industry is here

This quadrant II. X axis minus and Y axis plus

This quadrant I. X axis plus and Y axis plus.

This quadrant III. X axis minus and Y axis minus

This quadrant VI. X axis plus and Y axis minus. You are here