1. What is SWOT Analysis?
SWOT stands for:
Strengths
Weaknesses
Opportunities
Threats
It’s a strategic planning tool used to identify internal and external factors that can impact an
organization, project, product, or even a personal career path.
Strengths and Weaknesses are internal (things the organization can control)
Opportunities and Threats are external (things the organization cannot control)
🕐 2. When to Use SWOT Analysis?
Use SWOT when you need to:
Develop a business strategy (corporate, unit, or functional level)
Evaluate a new product, market entry, or initiative
Conduct a competitive or market assessment
Prepare for strategic decision-making
Kick off a problem-solving or transformation workshop
Support client discovery in the early phase of engagement
It’s especially helpful in:
Strategy workshops
Client pre-sales situations or diagnostic phases
Internal reviews and portfolio assessments
🧠 3. How to Use SWOT Analysis?
Step-by-Step:
🔹 Step 1: Define the Objective
What are you analyzing? (Company, business unit, product, market, etc.)
🔹 Step 2: Brainstorm Internally and Externally
Create a 2x2 Matrix:
Internal External
Strengths Opportunities
Weaknesses Threats
🔹 Step 3: Fill Out Each Quadrant
Strengths (Internal, Positive):
What are we good at?
What resources do we have?
What makes us competitive?
Weaknesses (Internal, Negative):
Where do we lack capabilities?
What resource constraints exist?
Where have we failed before?
Opportunities (External, Positive):
What trends can we benefit from?
Are there underserved customer needs?
Is the regulatory or tech environment favorable?
Threats (External, Negative):
What are competitors doing?
Are there economic, political, or legal risks?
Could customer preferences shift?
🔹 Step 4: Analyze and Prioritize
Rank the items by impact
Identify how Strengths can be leveraged to capture Opportunities
Identify how to mitigate Weaknesses and defend against Threats
📌 Example: SWOT for a Retail Chain Expanding Online
Strengths Opportunities
Strong brand presence Surge in online shopping
Good supplier relationships New geographies to serve
Loyal customer base Low cost of digital marketing
Strengths Opportunities
Weaknesses Threats
No e-commerce experience Intense online competition
Legacy IT systems Cybersecurity risks
High fixed costs Price wars with online players
From here, the company can decide to:
Use brand loyalty to promote online sales (S→O)
Invest in new IT systems to reduce weakness (W)
Develop cybersecurity protocols (T)
📍 Additional Tips for Consultants:
Use SWOT to drive discussion, not as a final answer.
Always validate inputs with data or interviews.
You can make it multi-level – e.g., do SWOT by geography, business unit, or competitor.
Use SWOT as a precursor to more advanced tools like TOWS, PESTEL, Porter's Five Forces, etc.
✅ 1. What is Porter’s Five Forces Model?
Developed by Michael E. Porter, this framework helps analyze the competitive forces that shape every
industry. It goes beyond just looking at existing competitors by also considering suppliers, customers,
new entrants, and substitutes.
The model includes these five forces:
1. Competitive Rivalry (Center)
2. Threat of New Entrants
3. Bargaining Power of Suppliers
4. Bargaining Power of Buyers
5. Threat of Substitutes
🕐 2. When to Use Porter’s Five Forces?
Use this when you want to:
Evaluate the attractiveness and profitability of an industry
Understand industry dynamics before market entry or investment
Help clients decide where to compete (market selection)
Develop a business or market entry strategy
Anticipate external pressures impacting margins
It’s especially relevant in:
Market assessments
Due diligence for M&A
New product or service launches
Business unit strategy
🧠 3. How to Use Porter’s Five Forces?
🔷 Step-by-Step Breakdown of the Five Forces:
🔹 1. Competitive Rivalry (Center Force)
“How intense is the competition among existing players?”
Key factors:
Number of competitors
Industry growth rate
Product/service differentiation
Switching costs
Brand loyalty
High rivalry = price wars, shrinking margins
Low rivalry = stable pricing, better margins
🔹 2. Threat of New Entrants
“How easy is it for new players to enter the industry?”
Key factors:
Barriers to entry (e.g., capital requirements, regulation, IP)
Economies of scale
Brand loyalty
Access to distribution
High threat = pressure on prices and profitability
Low threat = incumbents are protected
🔹 3. Bargaining Power of Suppliers
“Can suppliers influence prices or terms in their favor?”
Key factors:
Number of suppliers vs buyers
Uniqueness of their product
Switching costs
Possibility of supplier forward integration
High power = suppliers can raise prices or reduce quality
Low power = buyers can negotiate better terms
🔹 4. Bargaining Power of Buyers
“Can customers push prices down or demand better terms?”
Key factors:
Number of buyers vs sellers
Switching costs
Product standardization
Price sensitivity
Backward integration potential
High power = buyers force down prices
Low power = sellers set favorable terms
🔹 5. Threat of Substitutes
“Can customers switch to alternative products or services?”
Key factors:
Availability of alternatives
Relative price-performance of substitutes
Switching costs
Customer loyalty
High threat = customers jump to alternatives, reducing your volume/margins
Low threat = fewer alternatives, stable demand
📍 Example: Airline Industry
Force Assessment
Competitive Rivalry Very high (many airlines, price-based competition)
Threat of New Entrants Medium (high capex, but low loyalty)
Supplier Power High (Boeing, Airbus, jet fuel suppliers dominate)
Buyer Power High (price-sensitive, low switching costs)
Substitute Threat Medium (trains, virtual meetings)
🧩 Conclusion: Low attractiveness industry — high competition, low profitability.
📌 Additional Tips for Consultants:
Always focus on industry, not individual companies
Use the model to explain why profitability differs between industries
Quantify where possible (e.g., concentration ratios, switching costs)
Consider recent changes or trends — tech disruption, regulatory shifts, etc.
🎯 Summary
Dimension Purpose
What A framework to analyze industry competition
When Market assessment, strategy design, entry/exit decisions
How Evaluate each force to assess industry attractiveness
Outcome Clear understanding of competitive pressures and potential profitability
✅ 1. What are Porter’s 3 Generic Strategies?
According to Michael Porter, there are three basic ways a company can achieve competitive advantage:
1. Cost Leadership – Be the lowest-cost producer
2. Differentiation – Offer something unique and valuable
3. Focus – Serve a specific niche better than others (can be cost-focused or differentiation-
focused)
Porter argued that firms must choose one of these — being stuck in the middle leads to
underperformance.
🕐 2. When to Use Porter’s 3 Generic Strategies?
Use this framework to:
Choose or evaluate a company's competitive strategy
Analyze how a firm positions itself in the market
Identify why some companies perform better than others
Develop or refine a value proposition
Test alignment between strategy and operational model
Particularly useful in:
Strategy engagements
Go-to-market planning
Business model assessments
Market entry strategy
🧠 3. How to Use Porter’s Generic Strategies
🔹 1. Cost Leadership Strategy
“Win by being the lowest-cost producer in your industry.”
Key Characteristics:
Large-scale operations, economies of scale
Lean operations, tight cost controls
Price-sensitive customers
Standardized products
Examples:
Walmart (retail)
McDonald's (fast food)
Ryanair (airlines)
When to use:
Market is price-sensitive
Your firm can achieve scale or operational efficiency
Product is a commodity
Risks:
Competitors may undercut pricing
Obsession with cost can hurt quality or innovation
🔹 2. Differentiation Strategy
“Win by offering something customers perceive as uniquely valuable.”
Key Characteristics:
Brand, innovation, design, features, service
Willingness of customers to pay a premium
Continuous investment in R&D, marketing
Examples:
Apple (design & ecosystem)
Nike (branding & design)
Tesla (tech & brand perception)
When to use:
Customers value features, experience, or brand
Your firm can consistently innovate or market well
There’s room for product variety or emotional connect
Risks:
Differentiation may not justify price premium
Customer preferences may shift
High cost of maintaining uniqueness
🔹 3. Focus Strategy
“Win by targeting a narrow market segment with specialized offerings.”
Two types:
Cost Focus: Serve a niche at low cost (e.g., Dollar Shave Club)
Differentiation Focus: Serve a niche with unique value (e.g., Rolex)
Key Characteristics:
Tailored offerings
Deep understanding of a niche market
Limited market size
Examples:
Rolls-Royce (luxury niche – diff. focus)
Aldi (cost-conscious niche – cost focus)
When to use:
You serve a specific geography, demographic, or use-case
Larger competitors are too broad to serve the niche well
Risks:
Niche may disappear or grow too competitive
Big players may start targeting your niche
🧩 Visual Summary
pgsql
CopyEdit
| Broad Market | Niche Market |
------------|--------------|--------------|
Low Cost | Cost Leader | Cost Focus |
Differentiated | Differentiation | Differentiation Focus |
📌 Additional Tips for Consultants:
Always map a company's current position — is it truly differentiated, or just marketing spin?
Use this to assess if the client is "stuck in the middle" — trying to do both cost and
differentiation without excelling in either
Ensure the chosen strategy aligns with capabilities and operations
🎯 Summary Table
Dimension Cost Leadership Differentiation Focus
Target Broad market Broad market Narrow niche
Competitive Advantage Lowest cost Unique value Specialized fit
Risks Price wars Cost to sustain uniqueness Limited market size
Examples Walmart, IKEA Apple, Nike Rolex, Dollar Shave Club
