Internet access survey Error! Bookmark not defined.

Executing a SWOT analysis is a must for any enterprise that wants to be successful in the business world. The following Self-Assessment Exercise will help to familiarize you with the elements of the SWOT analysis.

This is a tool of analysis that can be used by a business person to establish the strength, weakness, opportunities and threats that are likely to affect a particular businesses or product in the market.

When carrying out a SWOT analysis, this tool focuses on the entrepreneur and the potential competitors. The word SWOT is an abbreviation of;

S - Strength W - Weakness O - Opportunities T - Threats

Strength and Weakness are internal to the business or product whereas the Threats and: Opportunities are external aspects on the business or product.

These aspects may focus on number of items as seen below.

1. Strength. These are the strong points or things that put the business person at an advantage when compared to their competitors they are internal under business strength; one may look at aspects such as

159

 Increasing sales.

 Excellent marketing techniques.

 Having good customer care,

 Having a good location business site.

 Very good business reputation.

 A good brand name.

 Good public relations.

 High quality products.

 Attractive packaging facilities.

2. Weakness. These are the constraints for limitations that the business or product may encounter in the market arising from within the business or product itself, Weaknesses are internal to the market. Weakness may be manifested in the following forms.

 Few customers.

 Limited financial resources.

 Poor and inefficie.pt marketing skills.

 Location of selling. points not being convenience.

 High costs of productions.

 Having a small sales team.

 Weak distribution network.

 ''Unreliable supply of inputs.

3. Opportunities. Opportunities are external advantages that may exist in the surrounding and can benefit the business. It is important to note that the business has no direct control over such factors. In case they happen, the business takes advantage of their opportunities available to a business may include: -

 Reducing number of competitors in the market.

160

 A shift in the tastes and preface of customers in favor of the businesses products.

 An expanding market.

 Possibility of merger with a big competitor.

4. Threats. These are external undesirable events or occurrences which may take place in the market to the disadvantage of the business or products.

Threats can be in form of;

 Scarcity of raw materials in similar products.

 Setting up of new business dealing in similar products.

 Reduction in population thus the available market,

 Lowering prices by the competitors.

 Increasing sales of substitute goods.

 Negative change in tastes & preferences of the products in question.

 Higher taxes (increments in Taxation).

 Entry of lower cost firms in the market.

161

The following is an example of a SWOT analysis of a school business.

Strength Weakness

 Very good Teachers.

 A Modern laboratory.

 Enough infrastructure in form of class rooms, recreational facilities, etc.

 Many students enrolling.

 Good reputation.

 High good grades.

 Central location

 Lack of staff houses.

 Low salaries for teachers.

 Lack of a transport van for both

 Teachers and students.

 Indiscpline of some students.

 High rate of teacher turn over

Opportunities Threats

 Increasing population growth in the

 area.

 Closure of some neighboring schools.

 Scarcity of teachers for science subjects.

 Increased prices of food material to feed the students.

 Government policy of ensuring that all children go to school.

 A sponsorship opportunity by Ngo's promoting the girl child Education.

 New schools being set up.

 Increased taxes on school business by the government.

 High drop out of students to work in nearby factories.

After making a SWOT analysis, the entrepreneur would then compare his ability to offer his product/business on market with the existing competitors to determine whether to go in that business or not, The SWOT analysis will greatly guide the entrepreneur in taking a final decision.

162

SELF ASSESSMENT EXERCISE

You are the owner of Fati‘s Pizza Shop in Umuahia in Abia State of Nigeria.

Your business has been operating for the past four years and made a handsome profit, in the first three years. However, the current year‘s sales figures are bad with a 20 percent decline in turnover. Yesterday evening you listened to the news at seven and heard about the following major developments in the economy:

i. A decline in the inflation rate of 2 percent for the year.

ii. A decrease in the interest rate of 2 percent for the past year.

iii. An increase in unemployment of 5 percent, with specific reference to the high level of unemployment in the country.

iv. A growth in fast-food enterprises of 20 percent over the last year.

v. A decline in the per capita personal disposable income of 10 percent during the last year.

vi. New legislation whereby more females must be employed in the existing workforce.

After listening to this news you spent the whole night thinking about it and the implications for your business. This morning you phoned the nearest branch of the Small Business Development Corporation (SBDC) for advice. The consultant advised you to do a SWOT analysis of your business. Draw up a list of its strengths and weaknesses, and current opportunities and threats.

IN CONDUCTING THE MARKET ASSESSMENT OF A GIVEN PRODUCT

1. First, there is a selection of a product {good or service} for which market assessment is to be done.

2. The market area where the assessment of a given product is chosen.

163

3. This is followed by deciding on the approach and methods to be used in assessment. These could include sampling and survey techniques, field experiments, access by using the market potential and the strength of the weakness, opportunity and threats (SWOT analysis).

4. This is followed by the development of data collection of the 5pcs i.e.

information in regard to price, product, place, positioning and promotion.

5. Analyzing of the data that has been collected in the steps above, 6. Analyze the market strategy, which the entrepreneurs come up with.

7. Lastly, the assessing of the feasibility and viability of the selected products in the market,

4.0 CONCLUSION

In this unit, you have learnt about the micro and macro-environmental variables and their implications for marketing firms.

5.0 SUMMARY

An enterprise functions within certain marketing environmental variables. These variables are known as controllable and uncontrollable variables. These variables influence the activities of an enterprise. Therefore, it is the task of management to evaluate these variables and their impact on the enterprise and to recommend strategies to utilize the opportunities and counteract the threats.