Strategic SWOT and Sector Analysis

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1. Introduction

Different tools are available to assist strategic planners. Different tools will suit different types of organisation, and different levels of strategic planning. Some focus on what is a Strategic Management Information System (SMIS), while others more on what an SMIS can do to provide management with the required information.

2. Strategic Analysis Approaches

2.1 SWOT Analysis

SWOT analysis enables organisations to estimate the gap between where the organisation is and where it needs to be to meet its objectives, by providing a tool to analyse the benefits and risks involved in different strategies so that the best strategy can be chosen. It is a particularly useful tool in that it provides a framework for analysing and comparing factors that are both internal and external to the organisation, as shown in Figure 11:

Strengths and Weaknesses

Traditionally, Strengths and Weaknesses analyse internal factors, such as staffing resources and equipment. For example:

• does the organisation have enough staff with the right skills?
• Are staff adequately trained and developed and in other ways encouraged to stay, or is there a high staff turnover?
• Does the organisation have the relevant automated processes in place, and adequate IT resources?

How might a company's strength be weakened?

A company may have a good product (quality, competitive price) but poor after sales support.

Opportunities and Threats

Opportunities and Threats are traditionally considered external factors. A company does not operate in isolation, but must consider the impact of its actions on customers, suppliers, competitors and, increasingly, on the environment (though many corporations are not yet held to account for any adverse affects their operations may have). Conversely, before some decisions can be taken, the strategic planner must know and understand the environment (for example: nature of the industry, current economic situation, socio-political climate, legal requirements etc.) in which the organisation operates.

Note that the effectiveness of a SWOT analysis depends in part on how it is used. Like any other tool, in the hands of a skilled user it could be effective. Skill here does not just mean experience in wielding it, but includes the ability to carry out an objective and honest assessment of the organisation and the current situation in which it finds itself.

2.1 Sector Analysis

Where do the elements of SWOT and Sector analysis coincide? And where are the most striking differences?

It is likely that there will be some cross-over of elements in these two analyses. For example: the size of an organisation may be a reflection of its strength or weakness. Threats and Pressures may have similar sources, and Trends may provide Opportunity or Threat. Information Systems (IS) needs and markets may also be reflected in the organisation's internal elements (strength/weakness) or in outside influences (opportunity/threat).

Sector analysis provides a checklist style approach to structured analysis, but the name is not an acronym. Table 2 demonstrates what Sector analysis prompts you to examine:

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Reference(s)
	Book		Chaffey, D. & Wood, S. (2004) Business Information Management: Improving Performance Using Information Systems. Financial Times Prentice Hall: United Kingdom (UK), England, Essex, Harlow. [ISBN: 9780273686552]. [Available on: Amazon: https://amzn.to/3yZ6vdF].
	Book		Laudon, K. C. & Laudon, J. P. (2007) Management Information Systems: Managing the Digital Firm. 10th Edition. Pearson Prentice Hall: United States of America (USA), New Jersey (NJ), Bergen, Upper Saddle River. [ISBN: 9780132415798]. [Available on: Amazon: https://amzn.to/3UhgqDH].
	Book		Pearlson, K. E. & Saunders, C. S. (2004) Managing and Using Information Systems: A Strategic Approach. 5th Edition. John Wiley & Sons: United States of America (USA), New York (NY). [ISBN: 9781118281734]. [Available on: Amazon: https://amzn.to/3TMqOTZ].
	Book		Robson, W. (1997) Strategic Management and Information Systems: An Integrated Approach. 2nd Edition. Pitman: United Kingdom (UK), England, London. [ISBN: 9780273615910]. [Available on: Amazon: https://amzn.to/3EZNmvZ].

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Reference (or cite) Article
	Kahlon, R. S. (2013) Strategic SWOT & Sector Analysis [Online]. dkode: United Kingdom, England, London. [Published on: 2013-01-05]. [Article ID: RSK666-0000062]. [Available on: dkode | Ravi - https://ravi.dkode.co/2013/01/strategic-swot-sector-analysis.html].

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