Now Let's have a detail look at their meanings. Categories There are 4 components in this analytical gauge. They can be grouped in two ways - based on their scope and nature. On the basis of the scope the four components of SWOT can be classified as:
Pamela McClinton Running head: Many business managers do not fully understand the goals behind strategic management or why it should be implemented in their organizational environment.
A thorough understanding of the purpose of strategic management can help organizations gain a competitive edge within their industry, but not without the analysis of various strategic management analysis tools that have been designed to aid in the strategic management process and promote organizational growth.
This review also provides a synthesis of these tools to show organizational leaders the differences when comparing one tool to another which facilitates the determination of the best tool to fit organizational need. A Review of Literature The global marketplace has changed dramatically over the past century.
The rise of the Industrial Age brought nationalization as businesses began to expand from being situated in one city or state to positioning themselves across state lines and into various parts of the country.
The Information Age thrust businesses even further, taking expansion across continents and establishing a full-fledged global marketplace. With a global outlook, businesses experienced growth on a massive scale with divisions of their organizations thousands of miles apart.
Not only did organizations desire to thrive, but in order to continue their growth, managers needed to maintain a competitive edge in the marketplace. The evolution of the global business organization was fostered by business managers constantly in pursuit of management techniques that would propel their organizations farther.
Managers have found that sustaining competitive edge yields greater revenue, organizational growth, and industry leadership over their contenders. But staying competitive in the marketplace did not prove to be an easy undertaking.
Thus, managers from organizations around the world devised systems that have become known universally as strategic management. Strategic management offers an organization a multitude of benefits, and many researchers have theorized the goals of strategic management in their literature.
Furthermore, an examination of the most common strategic management tools aids the awareness of how these instruments, when applied within a business organization, lead to competitive advantage, growth, and greater business revenue.
Strategic Management Since the inception of business itself, management, or the administration of responsibilities that govern an entity, has existed.
Through the coordination of activities to get the necessary work accomplished that produces a product or delivers a service, management has experienced challenge. These challenges have ranged from employee supervision, to customer satisfaction, to business growth.
When the founder of strategic management, Alfred Chandler began investigating organizational growth, his interest was drawn largely due to the intense crises endured by businesses such as Du Pont, General Motors, and Sears Roebuck. Chandler deliberated the challenges noticing that when Sears Roebuck was forced to choose survival or downfall, the business made tactical steps to move its mail order business to chain stores situated mostly in urban areas.
The concept of strategy in business was fashioned and a few years later, Chandler released his book Strategy and Structurewhich is still considered a significant historical work in the world of business.
In this work, Chandler theorizes the unprecedented value of implementing an organizational strategy before carrying out the structural procedures of day-to-day business.
This new idea proposed that when management employed strategies for long-term growth, they reduced overwork at the top and opened up the capability to move into new product markets and even shift into new geographic areas. Strategic management can be a broad concept that may overwhelm administrators when trying to apply it to an organization.
These tools are also useful for evaluating weaknesses, competitor strengths, environmental and societal demands that could jeopardize organizational growth. The application of one tool over another relies heavily on the goals of the tool and the objectives of the organization.
Porter, a Harvard graduate and professor, produced the five-forces model in his book Competitive Advantage: In this model, Porter rationalizes that in order to manage an organization strategically, management must start with analyzing the competition. These five components comprise the five forces facing an organization that must be strategically planned and administrated by organizational management to gain or sustain a competitive edge in the marketplace.
Threat of new entrants. The threat of new entrants identifies the challenges facing new businesses that desire to penetrate the marketplace. This information is vital for an organization to examine because threats to entry into the marketplace can impede goals to expand the organization nationally or internationally.
Instructions for Conducting a SWOT Analysis Coalition building is a means of engaging a broad and diverse group of partners to develop your strategy. Consider the. Running head: STRATEGIC MANAGEMENT ANALYSIS TOOLS 1 Strategic Management Analysis Tools: A Review of the Literature Pamela McClinton Liberty University STRATEGIC MANAGEMENT ANALYSIS TOOLS 2 Abstract Strategic management allows organizations to review current processes and make intentional . SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to .
Organizational leaders must recognize that not only customers but suppliers as well can impact businesses in an industry through the use of demands on the prices, value, or quantity of a product or service. Bargaining power of suppliers.
From an organizational perspective, when suppliers attempt to control the market through by escalating prices or decreasing the quality of inputs this causes suppliers to become a danger to the growth of a business.
Bargaining power of buyers. Similar to the bargaining power of suppliers, buyers can choose to control the industry by requiring lower prices or demanding a higher price but only with a higher quality of the service or product.
Within an industry, the service and product offerings produced by industry contenders increases market share. Rivalry among existing competitors.Organizational analysis or more commonly Industrial analysis is the process of reviewing the development, work environment, personnel, and operation of a business or another type of association.
This review is often performed in response to crisis, but may also be carried out as part of a demonstration project, in the process of taking a . The internal vs.
external template segments your SWOT analysis into internal factors related to your team and processes against external factors that are outside your company.
This Excel template highlights the relationships between each of the components. Although there are various ways to handle this concern, the easiest way to do this is to explicitly structure (and label) each distinct point you are trying to make in your write-up so that item #1 in the issues section corresponds to item #1 in the analysis .
Tesla, Inc. is known for its high rate of innovation, especially in introducing the world’s first fully electric sports car.
This internal strategic factor is a strength that empowers the company to develop competitive and profitable products. SWOT Analysis. SWOT is an acronym used to describe the particular Strengths, Weaknesses, Opportunities, and Threats that are strategic factors for a specific company.
What are the major cost and value-added components for various types of competitors? Distribution Systems: An environmental analysis is the fourth dimension of the. There are four essential key factors to evaluate an organization's performance, which are the components of a SWOT Analysis - Strengths, Weaknesses, Opportunities, and Threats.
A deeper understanding of them can help you conduct SWOT Analysis better.