Analysis: Internal And External Environment

INTRODUCTION

The SWOT is used to analysis internal and external environment. When considering the strategic planning process, SWOT is playing a very important part. Structure of the SWOT has been designed by Edmund P.Learned, C.roland, Christiansen, William D.Guth and Kenneth Andrews in the 1960. It is recognized as (SWOT) Weaknesses, Strengths, Opportunities and Threats by Albert Humphrey from Stanford University. It is a result of Team Action Model Research project. SWOT spreads from the TAM concept. It is an important to analyses the internal and external environment for the strategic planning. SWOT is represented internal factors and external factors which affect to a company. Internal factors are Strengths (S) and Weaknesses (W).

SWOT analysis is the most well-known tool that is used for there auditing and analysis on whole strategic position of any business and its environment. In other hands, it is the basis for assessing the internal potential and limitations and the feasible opportunities and threats from the external environment. SWOT shows all positive and also negative factors out side and inside the firm that disturb the success of the company. It is major purpose is to recognize the approaches that will generate a good model which firm on specific business. Hence it will best support an organization’s capabilities and resources to the requirements of their environment. A reliable study of the environment, which the firm functions supports in forecasting, predicting the future plans. It is important to understand the changing trends and also helps in comprising them on there decision-making process of the company.

Internal environmental factors that hold to the firm usually can be classified as strength and weaknesses. External to the firm can be classified as opportunity and threats. Analysis of the internal and external environment in the strategic environment is referred to as SWOT analysis. The SWOT analysis offers information that is supports in the firm resources and abilities to the modest environment of the company which it operates.

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A firm’s strengths appear as its capabilities and resources. They are using to achieve a competitive advantage. Those are customer satisfaction, market share, customer retention, and product or service quality, pricing effectiveness, distribution effectiveness, promotional effectiveness, positioning, targeting, sales force effectiveness, innovation effectiveness and geographical coverage. The absence of firm strengths may be observed as a weakness. Which have lack of marketing expertise, indifferent services or products, location of their business, poor quality services or goods and damaged reputation? When consider external environment investigation may expose confident new opportunities for growth and profit. So their opportunity may be a developing and improving market such as the mergers, Internet, joint ventures or the strategic alliances, which moving into new competitive market segments which offer that improved market and profits there vacated by the an ineffective competitor. So it is conveyances us to an external environment change is called threats to the organization. Those are new competitor for firm market, increase price of services or product. With competitors and a competitor has a new, innovative service or product

The SWOT analysis can help as an interpretative screen to reduce the details to a manageable amount of key issues. Considering the internal and external condition analysis can create a large amount of information. Those can be highly relevant or not. Strengths may appear as the foundation for building a competitive good advantage, and also weaknesses may delay it. It is important to be understood these 4 aspects of there situation, so a firm can be a better influence its strengths, correct its weaknesses, exploit on opportunities, and discourage potentially threats. Skoda Company had done SWOT analysis and identified weaknesses, strength, threats and benefits of SWOT analysis are given below.

Identified Weaknesses of Skoda

According to the Skoda Company SWOT analysis shows two major weaknesses could be identified they are less market share and poor perception. When it is considered the Skoda their market share is 1.7 percent. So it reviews a small partition in the car market. Other one is poor perceptions actually this is a weakness due to poor perceptions of the brand. These associated to Skoda cars’ which have had eastern European origins those cars had poor vehicle quality, assembly, design and materials. So these poor perceptions were affected owners.

Strength used to overcome the weakness of Skoda

The Skoda brand name is strength of the Skoda. It has been used to uplift there market share. Skoda was able to have 1.7 percent market share. Any way it was recognized as weakness of the Skoda by SWOT analysis, any how there brand name has been recognized as strength of Skoda by SWOT analysis. At present this brand is now being more mainstreams, as it benefits it increases in both brand recognition and awareness. Brand name has been used to develop the market share of Skoda Company.

The quality of cars was increased and it is quantifiable and identifiable strength of their crated brand name was helped to the company to generate increased and develop profits and sales. Actually brand name plays an important role in dominating market share. When there is a good brand name people may be well aware of the product and they are willing to bye it. Other key point is there having a strong business through efficient distribution channels. When it visible all their products at anywhere it automatically convenient to choose. So using limited resources more production is achieve without loosing money. For the customer satisfaction the strength of the Skoda was helpful.

Skoda created a Poor perception, because they used eastern European origins as mentioned earlier. Their cars had poor vehicle quality, assembly, design, and materials. The Skoda owners also were affected by poor perception from 1999 onwards. Under the Volkswagen AG ownership, they were able to change this negative image with the help of customer satisfaction. There after cars were no longer seen as low quality or low-budget.

The SWOT analysis, which is greatest to emphasis in what the customers and market, sees as the company’s major customer service strengths. In every market, there are market supporters and market frontrunners’ in every market. Companies today trust less upon whether those are first, or last at market, but as an alternative focus on reaching the market on time. Any way, in customer service, disagreement was able to produce those companies as service leaders. Always it is trying to win the day. According to that, which are the company’s highest strengths in customer service from the lookout of its company’s market and customers? In opinion of these facts it is not unexpected that there is rising attention in understanding the connection between customer satisfaction, quality and firm performance.

SWOT analysis has been used to whole considerate of the brand’s weaknesses acceptable it to grow an approach to build up the brand and take benefit of the prospects in the market. It concentrated on its prevailing strengths and provided their cars focusing on the customer awareness. It was recognized beginnings in the market introducing new products and differentiates on its product series. Skoda manufactured new diverse cars to fulfill customers and occupied the cavity of market.

Strategic plans are required to explain what types of strategic objectives and also organization may like to accomplish and how this is to be done. Strategic plans must consider the quantity of resources available. The critical resource will be capital. So it appears as new competitor in the market, price wars with those competitors and he has a new, innovative service or product. When consider the Uk car market Skoda faced a threat. There fifty different car makers sold Two hundred models. So to overcome these problems they needed to increase the production rate within there are over 2,000 model derivatives. Skoda needed a good and satisfactory strong product range in the UK and globally. When consider In UK the Skoda brand being characterized by the seven different cars. Each one has been designed to demand to different market segments. Skoda manufactured new commercial strategy to increase and compete its market share at targeting mainstream car market. Consumers may be able to transfer of the discounts easily and also even ask for free sample. Companies will be rough more strongly touching each other to achieve the sale and keep up customer from changing to another store or supplier. So the Marketing should play a violent role in coming up with promotionally campaigns to establish the customer loyalty. Skoda has introduced latest promotional campaign to prevent that situation. Their main messages for the campaign have focused on the `happy’ customer appeal and experience at an emotionally than at a practical level. What they have included as campaign is television advertising. It was been showed that the car as `full of lovely stuff’ with using a happy music in background. In addition that using web has focused the young generation to make their attraction of it. This has been a good appeal to the young audience. At the same time Skoda has introduced environmental friendly brands, so it is helpful overcome threats EU environmental and legal regulations.

Importance Benefits of SWOT Analysis

The SWOT analysis is an instrument for companies to evaluate the business and to improve strategies to continue competitive. It is focused characteristics of the company and business sector and to establish the results to assess the current status of the business, future predictions and the financial balance. A SWOT analysis stimulates serious and definite rational to improve strategic objectives and plans. Has SWOT analysis is shown there value when it is applied to management, organizations structure and marketing. The SWOT analysis value is to formulate a portrait of the present competitive landscape and it is identified areas which can be improved. SWOT analysis can provide companies with separate insight regarding arranging strategies and tactics to gain an advantage. Formulating a SWOT analysis is not difficult; it should be revisited on a consistent basis under evaluate the strategy. Which is the best method of admission industry’s current position and future? It improves strategic plans and goals by endorsing specific and critical thinking.

Other importance of the SWOT analysis is it use by non-profit organizations, when decision making. Strategic planning can be divided into three basic strategic environments; they are industry environment, macro environment and internet environment. Industry environment is the one that is using to recognize the nature of their competitors within their organization.

SWOT analyses plays as strategic tools that businesses employ when they are important to make decisions of new strategies, also evaluating company’s external and internal environments. SWOT analyses study the weaknesses, strengths, opportunities and threats of organization or company. they can gain a superior image of their advantages.

a) Significant the Competition

The SWOT analyses show external threats of the company and one of the main external threats company appearances is its competitors. By acting a SWOT analysis, companies can assess who their competition is, and target against them to configure strategies that will have a competitive advantage.

So companies are using SWOT analyses for identifying their competition, those are placing themselves ahead of game and so it is able to well prepare for the competition.

b) Decision-Making Tool

The SWOT analyses attend as beneficial decision-making tools. According to the Manager’s view strategists are conducting SWOT analyses for it is needed in make decisions, because SWOT analysis gives experienced information that prompt knowledgeable decisions. According to the University of Kent says that since SWOT analyses deliver strategists with an outline of a firm’s weaknesses, strengths threats and opportunities, decision-makers are able to take all of the this evidence into consideration.

c) Forecasting

The SWOT analyses are permitted companies to forecast. Forecasting allows companies to make for things like economic breakdowns, worst-case that scenarios or returns for the investments. SWOT analyses provide benefits on forecasting efforts because those provide a range of facts which might be difficult to threats, forecasted variables. Such as, can be influenced a business’s forecast.

Conclusion

SWOT analysis is a powerful tool to helpful emerges for matching capabilities and firm’s resources for a competitive environment. And also the SWOT analysis is playing as an important planning tool for an organization or business. When it is considered the SWOT analysis there are more advantages and importance in competitive business world. Skoda is also one of business that is used SWOT analysis and it reviewed their poor sections in regarding other successive business. With these strategic options Skoda improved as global brand which is offering by positively responding external and internal issues to prevent losing business and market share.