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Discuss how SWOT analysis can help ST make decisions over strategy (planning) such as the best way of achieving its objectives.

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Introduction

17th December 2004 Discuss how SWOT analysis can help ST make decisions over strategy (planning) such as the best way of achieving its objectives. A SWOT analysis is an identification of the internal strengths and weaknesses and external opportunities and threats facing a business. The purpose of a SWOT analysis is to highlight potential in the market and business capabilities within it. Businesses generally use them to help plan an overall strategy for the company and they can be carried out to identify specific improvements required. When conducting a SWOT analysis they following things are taken into account: Estimation of the market in which the businesses goods or services are sold/ assessing whether the market is in decline/boom. Identifying key changes in the external environment which are likely to affect the business in the future. This is to do with such things as economic and competitive factors, legal, political and technological factors. ...read more.

Middle

In this case business look to seek out opportunities and ward off threats. Smilin Tiger has many strengths but also many weaknesses. Their strengths being such things as an established brand name which is helped by the publicity and promotion of a successful UK pentathlete (Trisha Thompson), an increase in the sales of its sportswear (sportswear is now becoming an increasingly used fashion item), the fact that they are a public limited company (which has benefits to its legal structure) and the fact that their customer base is the higher and middle income groups as these people are less income sensitive as they have more disposable income available to them. The weaknesses of the company are things like the worsening problems to do with recruitment and retention at both management and lower level, the fact that Jeff Laurel believes that just above the minimum wage is more than enough to retain the lower level members of staff, Smilin Tigers aim like objective of 'Profit maximisation' (with no specific target) ...read more.

Conclusion

This could increase the businesses market share and help them to achieve their objective of profit maximisation due to the fact that the business could charge a premium rate on its goods because of the fact their produce was manufactured under moral and ethical conditions. Lastly, the threats towards the business could be defined as the intensifying competition from other sporting activities and leisure pursuits, the adverse and embarrassing publicity over the working conditions provided by their Indonesian supplier which may negatively affect sales and also the changes in exchange rates (if the pound was to become weaker against the rupiah then it would cost the business more to buy from the Indonesian supplier). Many major strategic decisions affect businesses for several years to come and therefore they should be carefully reviewed before being gone ahead with. Smilin Tiger should undertake a SWOT analysis focusing mainly on its key stakeholders (employees, suppliers) before they make their final decision over their diversification plans. The SWOT analysis would benefit the company greatly and help it towards achieving its objective of profit maximisation. ...read more.

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