Strategic Thinking And Swot Analysis Commerce Essay

Strategic Thinking And Swot synopsis Commerce EssayIn this study, jam compendium is presented with elaborating the feels. Defining and articulating it roles in strategical supply and dilatement steps argon in addition covered. Besides, it exemplified in the case of presidencyal exercise for small and speciality enterprises in Egypt. work up which stands for an abbreviation of ( strength, impuissance, opportunity and threat) is an summary that particularized as method to strain organizations indwelling factors dealing with strengths and impuissancees, and its surroundal opportunities and in like manner the threats. SOWT abstract usually character in the preliminary phase of decision making as a general tool which it designed for being antecedent to strategic planning in antithetical case and applications. (Johnson et al., 1989 Bartol et al., 1991). base on aroundwhat antithetical definitions like Formisano (2003), stand up Analysis go off be employ as a stu mper, process, technique or framework to generate information astir(predicate) those factors in organization by having umteen applications with possibility of being used in all the directs of the organization. So, prep atomic number 18 hindquarters be defined as cozy abstract of organizational Strengths (what an operation does well) and Weaknesses (what an operation does non do well) and as well as the international compendium of environmental Opportunities (potential favorable conditions for an operation) and Threats (potential unfavorable conditions for an operation) and it is a general tool at the initial stages of indemnity making and strategic planning and as well, it is a incite of the last menti 1d stages of analyzing the performance and planning for further emergence of the organization on. organize analysis is used as a technique in purchase target to surface a planning process and solutions for the problems that argon bear ond with different innate and external factors and maximize the potential of strengths and opportunities as well as minimizing the negations of weakness and threats (Sharma Singh, 2010 Schermerhorn, 2006 Bennett, et al., 2003).The first step of bone analysis is a systematic paygrade of the organizations resources and capabilities. Strength in SWOT analysis is connected to hawkish avails and distinguishing competencies of the connection in its market environment. But weaknesses can be considered as limitations that can affect the progress of the comp whatever in a negative way. This valuation includes identifying shopping mall competencies by considering special strengths which ar superior to the competitors. The core aptitude is a special strength which gives an organization a competitory advantage and it may be found in special experience or expertise, superior technologies, efficient manufacturing technologies, or curious yield distribution systems, among many other possibilities. Strategy f ormulation has an aim which is to form strategies that leverage core competencies for competitive advantage by constructing organizational strengths and minimizing the impact of weaknesses (Houben et al., 1999 Schermerhorn, 2006).Figure 1. SWOT Analysis of Strengths, Weaknesses, Opportunities, and Threats(Schermerhorn, 2006, p.88)Strengths Strength of an operation is the first interior element of the SWOT analysis. The strengths cover what an operation does well. The strengths may be being low-cost maker or high quality product producer. It depends on the persuasion (Bennett, et al., 2003, p.2).Weaknesses The weakness of an operation is a nonher internal element of the SWOT analysis. Examining weaknesses cover identifying what an operation does not do well. They essential be examined from the internal and external perspective of the operation. Usually all operations, regardless of size or profitability do weaknesses (Bennett, et al., 2003, p.2).Opportunities Opportunity is the first external element of the SWOT analysis. The opportunities cover any convenient situation in the line of affairs environment that the operation may overhear an advantage form. The fly the coop can be from diversification and the use of red-hot technologies to market trends and relationship growings. And usually all operations check some opportunities. It is grave to break them well (Bennett, et al., 2003, p.2).Threats Another element of the SWOT analysis is the external threats. All operations can face threats and the threats can range from lower international prices to primordial relationships that have some problems. The operation of the organization must take some actions to prevent the external threats (Bennett, et al., 2003, p.2). SWOT analysis is used as inputs to generate possible strategies. And next step is to locate these strategies after the ap blamement and analysis of strengths, weaknesses, opportunities and threats (Houben et al., 1999).2.1 SWOT Analysi s StepsBased on Houben et al. (1999) as a first step in the nurture of a strategic planning system, business managers wherefore commence with the identification and evaluation of these strategic factors which assist or halt the party in matching its full potential. Normally e truly community is confronted with a propellent environment the relative importance of a strategic factor pull up stakes change constantly, so the SWOT analysis is correspondingly to be of a constant nature. The list of strategic factors can be used as a point of departure for the actual strategic plan within a small or medium sized enterprise. It is a limber instrument. The greatest advantage is that it helps managers of small and medium sized enterprises survey the different instruction areas, gain insight into the significance within the framework of the fraternity, and consequently initiate suitable actions. Bartol et al. (1991) mentioned that responding to internal strengths and weaknesses is therefore an essential component of the strategic solicitude process. But success can moreover be achieved in this esteem to the extent that one is familiar with the opportunities and threats resulting from the external environment. The recognition of the internal strengths and weaknesses, as well as external opportunities and threats, takes place on the creation of a study, which called SWOT analysis. Generally no standard list of life-or-death factors which apply for all companies exists because of the particular(prenominal)ity of this set. Within the framework of this study, however, we chose to concentrate solely on the internal business environment. This therefore only concerns the identification of strengths and weaknesses.Strengths thereby relate to the competitive advantages and other distinguishing competencies which can be exploited by the high society on the market. A distinguishing competence is something which can be done very capably by a family. Weaknesses , on the other hand, are limitations which stuff the progress of a company in a veritable direction. Weaknesses are those attributes of the organization that impede achieving the objective and limitations or deficiency in one or more resources or competencies relative to competitors that impedes a firms effective performance. Opportunities are international conditions that help to achieve the objective major situation in a firms environment. Key trends are one source of opportunities and identification of a introductoryly overlooked market segment, changes in competitive or regulatory circumstances, technological changes, and improved buyer or supplier relationships could show opportunities for the firm. Threats are also outside conditions that impede achieving the objective and impediments to the firms current or craved position. The entrance of new competitors, slow market growth, increased bargaining forefinger of key buyers or suppliers, technological changes, and new or r evised regulations could represent threats to a firms success (Mintzberg and Quinn, 1991). accord Johnson et al. (1989) Bartol et al. (1991) taking strategic actions is advised for the organizations to guard or sustain strengths, offset weaknesses, avert or mitigate threats, and trespass on opportunities. Strategies can consider as the equilibrise act amongst the external environment like opportunities and threats and the internal capabilities of the firm such as strengths and weaknesses. basically SWOT analysis is an extremely useful tool for reasonableness and decision-making for all frames of situations in business and organizations.As a first step in the victimisation of a strategic planning system, business managers should therefore commence with the identification and evaluation of these strategic factors which assist or hinder the company in reaching its full potential. Because every company is confronted with a dynamic environment, the relative importance of a stra tegic factor give up change constantly, so this analysis is harmonizely to be of a permanent nature. In identifying SWOT a particular factor is relevant only with reference to a specific objective. For example, a large cash remainder is strength if the objective is expansion. If the objective is to discourage a hostile take-over, a large cash balance is a weakness. The SWOT analysis headings provide a not bad(predicate) framework for reviewing dodging, position and direction of a company or business proposition, or any other idea. Completing a SWOT analysis is sometimes simple and useful which can be used for business planning, strategic planning, competitor evaluation, marketing, business and product bafflement and explore reports (Houben et al.1999).The strengths and weaknesses can be found in the operating(a) company fields, or they may be a consequence of irregular interaction surrounded by different fields. Furthermore, the strengths and the weaknesses of an aspect mu st be measured at different levels of the organization this can be at group level, at individual company level or at product or market level. The evaluation of the performances of the past may not be neglected with the measuring of strengths and weaknesses because it provides historic insight into the strategy of the company antecedently apply as well as the successes accordingly achieved (Glass, 1991). Historic investigations may not only be limited to the pure analysis of the paths followed by the company in the past and the results achieved, they must also devote attention to the reasons for this success. With the lists compiled, sort and group facts and ideas in relation to the objectives. It may be necessary for the SWOT participants to select their five most important items from the list in order to gain a wider view. Clarity of objectives is a key to this process, as evaluation and elimination will be necessary to cull the wheat from the chaff. Although some aspects may as k further information or inquiry, a classify picture should, at this stage, start to emerge in response to the objectives (Johnson et al., 1989 Bartol et al., 1991).3. SWOT Analysis and Strategic PlanningSWOT analysis is mainly part of the strategic planning process buy studying on internal and external forces in the business environment of a company of organization. As a first step of a strategic planning system, the strategic factors that are related with the potential of the company, should be identified and evaluated. The identification and evaluation of the strategic factors helps to reach an actual strategic plan and as a result the managers are able to gain insight of internal and external nature of the company and establish suitable actions in order to reach good performance (Houben et al., 1999, p.2) In order to have good performance in strategic planning, the future objectives on the companys strength and the weaknesses of the company must be considered by the company. I nternal strengths and weaknesses are the main components of the strategic management process but it must be reinforced with considering opportunities and threats from the external environment.According to Hill and Roy (1997, p.46), SWOT analysis is one of the most straightforward salutees for analyzing the strategy of an organization. SWOT as it explained before, is the acronym for strengths, weaknesses, opportunities and threats which according to Zack (1999, p.126) SWOT framework is one of the feeln approaches to define a strategy. Considering Zack, Hill and Roy statements about SWOT, it can conclude that this approach can be used in order to define and analyze organizations strategy. This analysis consists of two parts. First, we have to analyze the internal characteristics and capabilities of the organization, which analysis helps us to identify the strengths and the weaknesses that the organization has. In the second part, we have to analyze the external situations in the co mpetitive environment, which this analysis helps us to identify the opportunities and the threats that the company may faces. After identification of these four factors, a strategy for the company can be presented. Based on Zack statement (1999, p. 127) strategy is the act of balancing between internal and external situations of a given organization. And a good strategy is the one which ensure a fit between external situations of the company with its own internal capabilities (Hill and Westbrook, 1997, p.47). This analysis was in power for at least 30 years. Zack (1999, p.128) believes that companies who have superior intimacy, can sustain their competitive advantage by the use of those experience in order to combine, coordinate, develop and exploit their resources and capabilities in a new way and better than their competitors. Buckman Labs competed in certain markets based on its superior knowledge of how to apply its chemicals to elaborate the process treatment problems of its customers.After explaining SWOT framework in previous arm, and talking about knowledge as a strategic addition and the sustainable competitive advantage which could be achieved by the application of the knowledge that exists in an organization, the author (Zack, 1999, p. 130) proposes that Firms need to perform a knowledge-based SWOT analysis, procedure their knowledge resources and capabilities against their strategic opportunities and threats to better discover their points of advantage and weakness. The outcome of this analysis could be a map that can help the organization to tone up its knowledge advantages and reduce its knowledge weaknesses. This map reveals the knowledgebase resources and capabilities of one organization and the knowledge that this organization necessarily in order to be competitive in the market by providing the products and services. As we mentioned earlier, we can thought of this as a knowledge strategy.Zack (1999, p.131) mentions three steps that s hould be taken in order to describe the link between strategy and knowledge1. Organization needfully to identify its strategic goals.2. Organization must evaluate the knowledge that it needs in order to achieve its strategic goals.3. Comparison between the knowledge that one organization has and the knowledge that one organization needs reveals the strategic knowledge gaps of that organization.A firm, according with its current knowledge, must identify the dress hat product and market opportunities for exploiting that knowledge. For example, Most importantly, it recognized the difference and managed and developed its strategic knowledge accordingly (Zack, 1999, p.131).Therefore, we can consider the knowledge as an important strategic resource for sustaining the competitive advantage. There are 3 reasons wherefore knowledge makes the advantage sustainable, as first that knowledge which is gained from organizational procedures through experience is unique and cannot easily be repro duced. Because acquiring this knowledge require competitors to engage in similar experiences which need time and money. Second is that, those firms which know more can learn more in comparison to their competitors who have just started to gather knowledge. Third reason is that, the integration between new gained knowledge and the knowledge that the firm al fix has can create unique insights and more valuable knowledge that is difficult for the competitors to gain. These reasons all lead to a sustainable competitive advantage.Strategic management is a collection of decisions and actions that are taken by the business management to de bournine the long-term activities of the company. Basically strategic management has three elements (Houben et al., 1999, p.126), the formulation of a strategy the effectuation of a strategy the control and evaluation of the strategy. Internal and external environment analysis must be done before applying these stages. While analyzing of the internal a nd external environment will result in an overview of all opportunities and threats and also weaknesses and strengths will be reviewed and these are SWOT analysis results. If we want to define the internal and external environments, the external environment include the variables existing outside the company, they are in the short-term and not under the control of the company and they are from the context in which company exists and functions. The external variables are change integrity as direct and indirect environment. The elements or groups are directly influenced by the actions of the company are considered as the direct environment (industry environment), such as the shareholders, the government, the suppliers, the local authorities, the competitors, the clients, the creditors and the employees organizations. The general forces that have an impact on the long term decisions of the company are considered as indirect environment (macroenvironment) such as economic, socio-cultura l, technological, political and juridical influences (Houben et al., 1999, p.126 Schermerhorn, 2006, pp.87-88).The variables of the internal environment within the company blend in to the business management of the company that does not have an influence in the short-term. These variables include the company structure, the company culture and the resources of the company. One of the three elements of strategic management was the formulation of a strategy and it is a process for the development of long-term plans, to respond to environmental opportunities and threats effectively by considering the strengths and weaknesses of the company (Houben et al., 1999, p.126). Figure.3.1.1 illustrates the SWOT analysis of strengths, weaknesses, opportunities and threats.Companies need to take some specific actions to identify and find their competitive strengths and weaknesses and the development of the competitive strategy depends on building a global overview that considers the strengths an d weaknesses. The strengths and weaknesses can place in the functional company fields, or can be a consequence of unusual interaction between different fields. In addition, the strengths and the weaknesses must be analyzed at the different levels of the company such as organization, group, individual, company, product or market level (Houben et al., 1999).The current strategic position forms a very important point of departure for the development of a future strategy. It is very difficult to understand the current strategy if a formal planning system was previously absent. The studying of the competition, the current strategic prospects, performances from the past, the market possibilities and the market environment provide us with insight concerning information required for the indication of strengths and weaknesses. Where possible these strengths and weaknesses are to be represented in objective terms. It must be commented that most strengths concern the capabilities of certain pe rsonnel members or the resources at hand. A quality can accordingly be made according to the present product/market combinations. It is therefore sensible to make a distinction according to the extent to which these strengths and weaknesses are of a critical nature. As regards the critical factors, an get down must be made to sort them on the basis of strengths (Johnson et al., 1989 Bartol et al., 1991). nifty performances within a company are the results of correct interaction of the business management with its internal and/or external environment. To operate successfully in this respect, the company must concentrate its future objectives on its strengths, while avert tendencies related to the companies weaknesses. Responding to internal strengths and weaknesses is therefore an essential component of the strategic management process. But success can only be achieved in this respect to the extent that one is familiar with the opportunities and threats resulting from the external environment. Mintzberg and Quinn (1991) explained the recognition of the internal strengths and weaknesses, as well as external opportunities and threats, takes place on the basis of a SWOT-analysis. Within the framework of this study, however, we chose to concentrate solely on the internal business environment. This therefore only concerns the identification of strengths and weaknesses. Companies must undertake specific actions in order to distinguish their competitive strengths and weaknesses. The strengths and weaknesses are found in the functional company fields, or they may be a consequence of abnormal interaction between different fields. Furthermore, the strengths and the weaknesses of an aspect are measured at different levels of the organization this can be at group level, at individual enterprise level or at product or market level.4. SWOT Analysis in PracticeIn this section we can overview the SWOT analysis of organizational performance of small and medium enterprises in Egypt through promoting the human factors in quality management systems. This analysis has been done by the survey results (the answers in the studied questionnaire) were analyzed by the SWOT method in order to identify the Egyptian manufacturing SMEs Strengths, Weaknesses, Opportunities, and Threats, in order to generate information about their effectuate on organizational performance and to determine if there is a need to support systems for the organizations development or a need for system improvement (Shobery et al. 2010).This analysis the research team used as a guideline for developing the QMS model with focus on human factors. Egyptian manufacturing SMEs (Small-Medium Enterprises) have much strength and weaknesses, and many opportunities and threats which are generated from the business environment and have effects on the whole organization. Strengths of SMEs were confirmed by the results of the questionnaire and have supported, developed and promoted as a part of the basi c infrastructure needed to achieve the criteria of the business duty practices. Weaknesses indicated the problems and ineffective work systems which need to be solved and improved piecemeal to get a new and better infrastructure (Shobery et al. 2010).In their research they figured it out that opportunities mainly increase the number of international markets broadcast to Egyptian manufacturing SMEs. Threats are mainly generated through competitive situations from the international business competitors and free make do areas (FTAs). There is an increase in the number of abroad competitors most of which have a higher potential for international trade than Egyptian firms. Generally, strengths and opportunities influence the organizations performance in positive ways and also support the development of a QMS. In contrast, the weaknesses and threats have negative effects on the organizational performance, which hamper a successful implementation of a QMS. Effects of strengths, weakne sses, opportunities, and threats on the organizational performance in Egyptian manufacturing SMEs are presented in Table 1 and Figure 2.Based on their findings, a systematic schedule for the analysis of strengths and weaknesses is something constantly gaining popularity. Companies must undertake specific actions in order to distinguish their competitive strengths and weaknesses. History has shown this to be not particularly simple. Many companies only have vague ideas of the source of certain competencies and the extent to which they possess them. The absence of a global company overview prevents a clear picture being obtained. Despite these problems the development of a competitive strategy depends on having a global overview as regards strengths and weaknesses.5. ConclusionBy doing the SWOT analysis usually there are some ready expected advantages such as, an impetus to analyze a situation and develop suitable strategies and tactics, a basis for assessing core capabilities and com petences, the evidence for, and cultural key to, change, a stimulus to participation in a group experience.