skoda swot analysis case study

IvyPanda . (2021) 'Skoda Auto: Strategic Management'. 7 November.

IvyPanda . 2021. "Skoda Auto: Strategic Management." November 7, 2021. https://ivypanda.com/essays/skoda-auto-strategic-management/.

1. IvyPanda . "Skoda Auto: Strategic Management." November 7, 2021. https://ivypanda.com/essays/skoda-auto-strategic-management/.

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IvyPanda . "Skoda Auto: Strategic Management." November 7, 2021. https://ivypanda.com/essays/skoda-auto-strategic-management/.

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SWOT analysis of Skoda – Skoda SWOT analysis

SWOT analysis of Skoda – Skoda SWOT analysis: SkodaAuto is a Czech Republic-based manufacturer of passenger cars. Since its inception in 1895, the company has been synonymous with sedans. The most popular models that the company sells are Citigo and Octavia. Rapid, Karoq Kodiak, Superb and Superb.

In 1991, Skoda was acquired by the Volkswagen Group. It is now a fully-owned subsidiary of the auto giant. Through an annual production of 1,127,700 units, the company recorded a revenue of CZK 3348 billion. For the past few years, the company’s most popular brand has been the Skoda Octavia. It was re-engineered with a new engine as well as an automatic DSG auto-transmission in 2016.

Skoda’s technical expertise and experience allow it to launch more innovative and performance-oriented vehicles. Skoda is looking forward to participating in the electric and hybrid card segment. The company has also been researching autonomous vehicles and smart driving options.

Skoda fun facts: Skoda has also got a great line up of engines. The company offers best in the segment 1.0-litre TSI petrol engine which can churn out 108hp of power and 175Nm of torque. Skoda is still known for its 2.0-litre turbocharged petrol engine which is known it one of the most powerful at the time it was launched.

About Skoda – SWOT analysis of Skoda

• 1 About Skoda – SWOT analysis of Skoda
• 3 Skoda Competitors
• 4 SWOT analysis of Skoda – Skoda SWOT analysis
• 5 Strengths of Skoda – Skoda SWOT analysis
• 6 Weaknesses of Skoda – SWOT Analysis Of Skoda
• 7 Opportunities of Skoda – Skoda SWOT analysis
• 8.1 You May Also Like:
• 9 Conclusion

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[wp-svg-icons icon=”office” wrap=”I”] Company : Skoda Inc.

[wp-svg-icons icon=”user” wrap=”I”] CEO: Klaus Zellmer

[wp-svg-icons icon=”user” wrap=”I”] Founder: Václav Laurin

[wp-svg-icons icon=”calendar” wrap=”I”] Year founded: November 20, 1990, Mlada Boleslav, Czechia

[wp-svg-icons icon=”location-2″ wrap=”I”] Headquarters: Mlada Boleslav, Czechia

[wp-svg-icons icon=”stats” wrap=”I”] Annual Revenue: € 16.559 billion

[wp-svg-icons icon=”bars” wrap=”i”] Profit | Net income: €1.274 billion

[wp-svg-icons icon=”users” wrap=”I”] Number of employees : 32,985

[wp-svg-icons icon=”pie” wrap=”i”] Products & Services: Automobiles, Electric vehicles

[wp-svg-icons icon=”globe” wrap=”I”] Website:  www.skoda-auto.com

Skoda Competitors

[wp-svg-icons icon=”pacman” wrap=”I”] Competitors: Honda | Toyota | Nissan Motors | Chevrolet | Fiat | Mitsubishi Motors | Maruti Suzuki | Tata Motors | General Motors

SWOT Analysis Of  Skoda is brand-based. SWOT Analysis of  Skoda evaluates the brand’s strengths, weaknesses, opportunities, and threats. Advantages and disadvantages can be attributed to internal factors while opportunities and threats can be attributed to external factors. We will be discussing Skoda ‘s SWOT Analysis . Below is the detailed SWOT Analysis of Skoda .

Strengths of Skoda – Skoda SWOT analysis

The strengths of a business are the best operations that it does, which can help it gain an advantage over its competition. These are Skoda’s strengths:

• Unique styling: Skoda cars are distinguished by their unique styling. They look sharp from every angle. Skoda Superior, for instance, uses the Vision C design concept. It has a balanced look and sporty styling. Octavia is a sleek and racy design. Each car is unique and has its look. Their cars are also built to a higher standard than the rest.
• Support from Volkswagen:   Skoda Auto is a pioneer in innovation and technology. Their tagline “Simply Clever”, explains the features each car has. Skoda has now benefited from the experience and research of a larger company like Volkswagen. This is evident in the features-rich cars they have released since then.
• Customer Relationship: Skoda is well-known for its excellent after-sales service and customer relationship management. They consistently top various surveys that measure customer satisfaction. Some of their top areas include the initiation and conduct of salespeople.
• Comfort and luxury driving: Skoda cars are affordable for those who can’t afford a luxury car.

Weaknesses of Skoda – SWOT Analysis Of  Skoda

These are areas in which the brand or business is lacking. Skoda’s key weaknesses:

• Low presence in value segments: Skoda is not present in certain value segments, such as hatchbacks. These are the money-spinners for many players in emerging economies.
• Poor distribution channels: Skoda and Volkswagen have not been able to reach rural and local markets in countries like China or India. They mainly target urban and semi-urban customers. This is because they are unable to expand their distribution channels to reach remote areas.
• Pricing Skoda was unable to match the price of local players such as Maruti Udyog in India, who continue to dominate the market with economical cars in all segments. This is due to localization.
• Perception: Skoda has been perceived as an expensive brand. It is also considered to be a major player in the premium car segment. Although they tried to position themselves as a luxury brand that is valued, they are still unable to reach the mass market.

Opportunities of Skoda – Skoda SWOT analysis

Opportunities are those opportunities in the Environment around the business that can be used to increase its returns. These are some of the possibilities:

• High potential for small cars In most cities, people choose to purchase compact cars due to increased traffic congestion and poor driving conditions. This will increase the demand for smaller cars such as hatchbacks and convertibles. Skoda may not have many options in this area, so the company might need to take this segment more seriously.
• Transition customers: In emerging economies like India, there are a lot of customers who want to shift from sedans and SUVs to lower-end luxury cars. These customers are rising in the social strata, and are more quality-conscious and less price-conscious. Skoda must focus on this group of customers if they want to continue purchasing from them.

Threats of Skoda – SWOT analysis of Skoda

Threats are factors that can harm the growth of a business. These are some of the potential threats:

• Competition: The company is up against brands like Honda, Toyota, and Nissan as well as regional players like Maruti India.
• A competitor launching cheaper products. This made Skoda lose its market share again.
• Skoda needs a strong product range to compete in India and also globally

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Skoda is an international brand distributing goods in an extremely high competitive market. Every company has the right to respond on time to save their sales and profit in the market. Because Skoda won a lot of awards for producing quality automobiles. They also increased their assets gradually by focusing on customer satisfaction.

This is the SWOT analysis of Skoda .   Please let us know if you have additional suggestions to add.

[wp-svg-icons icon=”bubbles” wrap=”i”] Let us know What do you think?   Did you find the article interesting? Write about your experiences and thoughts in the comments below.

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SKODA - SWOT ANALYSIS IN ACTION 1: Introduction

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SWOT Analysis of Škoda Company

The key weakness identified by Škoda was that the company is unable to fit into a fragmented and highly competitive market with its current brand perception in the general public. Market shares for Škoda are small, largely due to the fact that their reputation did not grow a sufficient amount since 1999. This means that people usually regard their products as low quality, making the company lose substantial profit.

Škoda used its individual-centric brand appeal to promote its products to a bigger audience. While many individuals give Škoda low evaluations without using their cars, the loyal customer base is largely satisfied and catered to. By giving their utmost attention to the user experience, the marketers of Škoda have managed to address the main weakness of their brand – poor reception.

Škoda has segmented its market by producing distinct car models for different consumer groups. The difference in pricing helps address the competitive market they are placed in. They also solved the issue of abiding by government regulations by recycling their products, using environmentally-friendly manufacturing, and cutting fossil fuel consumption.

The benefit of SWOT analysis is that it allows companies to adjust their targeting techniques. For Škoda, it presents an opportunity to understand their strengths and weaknesses, as well as the approaches of their competition. By studying the available data, Škoda was able to bring new insight into their campaign and access the ways to address their competition.

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This blog is part of class project to explore various analytic techniques used by modern intelligence analysts.

Sunday, March 15, 2009

• Case Study: SWOT Analysis In Action At Škoda

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3 Great SWOT Analysis Examples with Real Companies

Whether you want to assess the current position of your business, expand to new markets, or simply develop a new strategy, a SWOT analysis is probably one of the first steps that you will probably make in that direction. And, if it wasn’t on your radar, it should be! Today, we will see some of the best SWOT analysis examples to get you inspired, and help you understand how to do use it effectively for optimum results.

If you are not familiar with the concept, a SWOT analysis is a key technique for assessing some of the most important aspects of your business. In fact, its name comes from the abbreviation of these aspects:

Strengths – internal

These are the strengths of your company compared to other industry competitors. For example, what is it that you do particularly well that others don’t? What is your unique selling proposition , or that service or aspect of your business that differentiates you from the rest?

Do you have a particular competitive advantage over your biggest competitors? This could be technology, an easy access to primary resources, more product personalization, and so on.

Assessing your strengths will help you identify your current position on the market. But also, give you insights on those aspects that represent a clear advantage for your business, so you can leverage them even more.

Weaknesses – internal

Weaknesses, as you might have guessed, are the exact opposite of your organization’s strength. In other words, what do your competitors do better than you ? In what aspect do they have a clear advantage over you?

Is it something that you offer but can improve, or is it a service or an aspect that you lack altogether? For example, your customer service might be unsatisfactory. Or maybe, a competitor has a particular technological feature that your product don’t offer at all.

We will see more of this with practical cases in our section of SWOT Analysis examples.

Opportunities – external

The next aspect of the SWOT analysis is evaluating the positive trends that can open a new opportunity for your business. They usually arise from the outside of your organization , such as industry changes, important movements on the competitors’ landscape, or even a change in the laws applicable to your industry.

Analyzing other factors, such as VUCA – the leadership theory on volatility, uncertainty, complexity and ambiguity, can also reveal new opportunities for your business. To identify them, you will have to look around you from an external perspective.

Can you spot any current trends that could represent an opportunity for your business? For example, the COVID-19 pandemic made companies like Nike and Adidas sell protective masks on their website as a part of their product portfolio. And many new businesses opened to profit from the changes.

Threats – external

Threats are another aspect that is external to your business, but can impact you negatively if you aren’t paying attention. Some examples include supply chain problems, shift in market requirements, changes to current laws and regulations, and so on.

Of course, threats are not always easy to identify. You will have to be proactively looking for them – if they are obvious, it is probably too late. What is the competition doing? How is the current technology evolving?

Are you noticing a change in user behavior regarding the consumption of your particular product? All these questions can help you get a better understanding of the market , and what could potentially be harmful to you.

And now, let’s get right to our SWOT analysis examples!

Disclaimer: These examples are merely my own analysis and interpretation of the information that is publicly available online for these companies. I don´t work at any of these companies, and I do not pretend that I actually know what is going on behind the scenes for any of them. It is just a practical exercise with real companies with the purpose of giving you a clear idea of how to perform a SWOT analysis.

1. The Coca Cola Company

First on our list of SWOT analysis examples is this one from The Coca Cola Company.

SWOT Analysis examples #1: The Coca Cola Company

Let’s discuss it in detail.

• Variety of products – one of the biggest strengths that The Coca Cola Company has is their incredible variety of products across different categories. In fact, there are over 500 brands across 200 companies owned by Coca Cola. This not only gives them a higher control on the market, but also more diversified expertise, and less overall competition.
• Market share – with a market share of 43% in the soft drink industry, they have a very solid positioning compared to many other competitors. Which also means that it would be extremely difficult to compete with Coca Cola and its almost unlimited resources.
• Brand recognition – Coca Cola is one of the most recognized brands in the world, which gives them a huge advantage in front of their competitors. It also means that any new product or brand they invest in will gain visibility almost immediately.
• Secret recipes – and last but not least, the company prides itself in having a secret recipe for its flagship product – the Coca Cola. This means that this product will be difficult to replicate by competitors.

• Health trends – one of the biggest weaknesses that the company has is its unability to adapt to current health trends. As people are becoming more and more conscious about the unhealthy food and the amount of sugar they are consuming, soft and sugary drinks are slowly getting substituted by healthier options.
• Sugar substitute – another health-related weakness for the company involves the difficulty of improving their quality of their product without affecting its famous taste. Coca Cola has been actively looking for healthy sugar substitutes for years with no success.
• Current positioning – the current positioning of Coca Cola and its soft drinks is both a blessing and a curse. A blessing, because everyone knows the brand and the product it offers. This kind of brand recognition is something that every company dreams of.

However, this weakness comes with the fact that Coca Cola already has a certain reputation established for itself that is difficult to change. And, considering its sugary drinks with mysterious and secret ingredients, it is certainly not the most positive one.

Opportunities

• Health trends – if The Coca Cola Company closely monitors and responds adequately to current health trends, they have a huge opportunitiy to increase their market share. And get an even bigger chunk of the soft drink industry. Especially if they manage to find a healthy substitute for sugar.
• Few major competitors – considering the dominance of the brand and only a few major competitors for these particular types of products, Coca Cola can quickly introduce new products with the right Marketing strategy.
• Healthier alternatives – although the company is quite dominant when it comes to soft drinks, a lot of other healthier alternatives are arising on the market. Flavoured waters, smoothies, organic drinks, green juices, and so on, are just some of the alternatives that people are starting to prefer as they get more conscious with their health.
• Negative press and media coverage – although The Coca Cola Company is known for its brilliant Marketing strategies and its incredible brand recognition, it also gets a lot of negative coverage for being unhealthy. In-depth research, Youtube videos, and even articles from reputable sources such as The Telegraph might cause serious harm in the long run.

Now that we have seen the first one, let´s move on to the next on our list of SWOT Analysis examples!

Next on our collection of SWOT analysis examples is Airbus, the world’s largest airliner manufacturer, and the one who took the most orders in 2019. So, let’s see what are the strengths, weaknesses, opportunities and threats for Airbus:

SWOT Analysis examples #2: Airbus

• Market share – with an estimated market share of almost 63% , Airbus is the largest aircraft manufacturer in the world, which gives the company a very strong and powerful position in the industry.
• Global network & international presence – with business operations located in Europe, the Americas, Africa & The Middle East, and Asia, Airbus has an incredible international network and presence.
• Innovation & technology – additionally, Airbus is putting a huge focus on investing in technology, innovation, and next generation manufacturing, more than any other competitor in the industry.
• Eco-efficiency – and last but not least, another strength that Airbus counts with is eco-efficiency. The company has been recognized is a leader in proposing and developing solutions for sustainable aviation.
• Delay in delivery – in 2019, Airbus took more orders for aircraft delivery than any other competitor, including its biggest rival Boeing. However, this caused a delay in the delivery of the orders, causing the company to accumulate a lot of backlogs.
• Operational inefficiencies – compared to rivals such as Boeing, Airbus has gained a reputation of being somewhat inconsistent when it comes to executing operations. The company is often delaying launches of its new models – for example, the launch of Airbus A380 was delayed by more than one year. This weaknesses is definitely something that Airbus could work on.
• High production costs – another key weakness of the company is the fact that it has higher production costs than its main rival Boeing, which leaves them with lower profit margins.

• Boom in Travelling – as the travelling industry is booming due to the growing percentage of the middle class, and the lower costs for airplane tickets compared to a decade ago, aircraft manufacturers are receiving more orders than ever. In fact, even in the next few years, the air traffic is anticipated to grow by 4.3% annually. According to Airbus , this alone will require “ 39,200 new passenger and dedicated freighter aircraft over the next 20 years.”
• Technological advances – over the last few years, the industry has gone through a lot of innovation processes and technological improvements. This has allowed Airbus to improve its weaknesses and offer better and faster performance. Also, the fact that aircrafts are becoming more and more secure with the new technologies make people want to travel even more. 
• Competition – the competition in the aerospace industry is practically considered a duopoly. The reason why is because Boeing and Airbus have a combined share of 91% for the whole commercial aircraft market globally. This means that they will not have to fight off small competitors, but also that the competition between both companies is extremely fierce. Which can be a significant threat for Airbus.
• Global pandemic – in 2020, the whole world suffered from the COVID-19 pandemic. This alone had a severe impact on the growth of the commercial aircraft market, as people suddenly had to stop travelling. And although this was a temporary decrease that is slowly starting to recover, aircraft manufacturers like Airbus will be affected at least for the next one year.
• Potential competitors in key markets – of course, the fact that Airbus and Boeing are currently dominating the global market does not mean that this will last forever. Currently, important markets like China and Russia are also planning to develop their own commercial aircraft. If that happens, it will most probably shrink the market share for Airbus.

Next on our list of SWOT Analysis examples is Zara, one of the biggest clothing companies in the world. Zara is a brand owned by Inditex , among with several others such as Bershka, Stradivarius, and Oysho.

SWOT Analysis examples #3: Zara

• Efficient manufacturing & delivery – Zara is one of the most efficient clothing companies in the world when it comes to all operational processes – manufacturing, delivery, supply chain and logistics. Reportedly, the company needs just 1 week to develop a new product and get it to all 2,259 stores it has worldwide, compared to an industry average of 6 months. This gives Zara a huge advantage when it comes to delivering new designs in record time.
• Competitive pricing – additionally, the company also offers a very competitive pricing for the variety and amount of products it offers. Its clothing is targeted to a middle class audience, although it´s also true that the pricing is adapted to the characteristics of each market. For example, the prices for Zara in South Korea are 96% higher than the prices in Spain, taking into account the exchange rate of the study.
• Strong global presence – As we already mentioned, Zara has over 2,200 stores across 96 countries, positioning itself as a strong international brand with a solid support (Inditex, with over 7,000 stores ).
• Fast reaction to new trends – the company is known for imitating high-fashion trends, and it is extremely fast when it comes to spotting and replicating them for its own products.

The company´s strengths is what makes it one of my favourite SWOT analysis examples on this list. They are very well defined, and definitely makes Zara stand out from competitors. However, this does not mean that there are no weaknesses:

• Zero policy advertising – the company is famous for its zero policy advertising. This means that, instead of investing in Marketing and Communication actions, they use the money for opening new stores. Although this policy has some awesome benefits, I think that it´s also a very big weakness. The heavy digital advertising done by competitors can completely overshadow Zara in the long run.
• Limited product stock – because Zara delivers fashion pieces in record time, they don´t produce as much stock as other companies would. Which is not great news for customers who often love a piece, and it is already out of stock – or simply not in the size they need.
• Controversies – additionally, the company is also involved in multiple controversies revolving child labour and paying under minimum wage. As people are getting more and more conscious about these topics, these controversies is doing a lot of harm to the company´s reputation. 
• High fashion imitation – as we already mentioned, Zara is known to imitate fashion trends. Which means that they are not a trend setter, and they do not offer a lot of unique and creative pieces designed exclusively by them.

• Growing demand for high fashion – currently, there is a growing demand for clothing that looks high fashion, but don´t cost thousands of dollars for a single piece. This is a great opportunity for Zara, which does precisely what people want – selling high fashion style for affordable prices.
• Fast fashion – as customer behavior is changing, people get bored with everything faster than ever. And this is true for fashion as well – clothes that people would wear for months and years now get substituted with new pieces much more often. Which is another excellent opportunity for Zara as the so-called “fast fashion is on the rise”.
• Market growth – according to Statista , the growth of the apparel market is steadily increasing by 5-6% every year, which is great news for clothing companies like Zara.

And now, let´s take a look at the external changes that are imposing a threat for this one of our SWOT analysis examples:

• Growing competition – the increasing demand for fashion and apparel also means that competition is growing as well. With huge online providers taking over the Internet such as ASOS, Fashion Nova, Shein and others, Zara´s popularity is becoming threatened by other companies. Especially considering the fact that these providers actually offer products from multiple brands at the same place.
• Increasing costs – another tendency that could impose a significant threat for Zara are the increasing costs for production and raw material. Which, as a consequence, will probably reduce its revenue and profit margins. Especially considering the fact the prices are already relatively low! For now, Zara has managed to develop a well integrated and efficient supply chain that keeps the cost of raw materials low. But this might not last forever, especially if the prices keep rising.
• Regulatory threats – the business industry is gradually getting more and more regulated. On a global scale, governments and legal agencies are regulating all kind of sectors and businesses, and the fashion market is not an exception. This includes labour, quality, customer services, and many other aspects of the industry. All of these regulations might eventually have a negative impact on Zara.

Do you want to learn more about SWOT analysis? You might want to check these articles:

• 9 Effective Ways to Identify Opportunities in SWOT Analysis
• 10 Common SWOT Analysis Mistakes in 2022 & How to Fix Them

Need more SWOT analysis examples? Check out our article on Coca Cola SWOT analysis.

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How do you write a good SWOT analysis?

The first step for writing a good SWOT analysis is to determine your objective - what company and strategy are you going to analyze? Next, take a piece of paper and draw a grid with 4 squares, labeling each one of them as it follows - Strengths, Weaknesses, Opportunities and Threats. The key to a good SWOT analysis is getting as specific as possible with each section in order to get more tangible and clear points of action.

What is a SWOT analysis tool?

SWOT analysis is a technique for strategic planning that allows you to assess and identify the strengths and weaknesses of your company (internal factors), as well as the opportunities and threats that may come from the outside, including market trends and competition (external factors).

Why is SWOT analysis important?

SWOT analysis is important for businesses because it provides them with a simple, but powerful framework to assess their own ability to compete on the market, identifying strengths to highlight and weaknesses to work on improving. It also gives them a quick glance at the market from an outside perspective, allowing them to spot current opportunities and identify potential threats that should be addressed as early as possible.

What is the most difficult part of the SWOT analysis?

While the answer may vary between companies and industries, the most difficult part of the SWOT analysis tends to be Opportunities. The main reason why is because the answer may sometimes require a comprehensive and detailed market research to reveal certain opportunities.

And that was all from me, folks! I hope you liked my in-depth SWOT analysis examples. I think the best way to learn a concept is to see how it is applied in practice. For this reason, I wanted to focus this article from a practical rather than a theoretical perspective. However, if you have any questions, do not hesitate to send me an email at [email protected], or just let me know in the comments below!

Thank you for taking the time to read my article 3 Great SWOT Analysis Examples with Real Companies, and I hope to see you in the next one!

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SWOT Analysis Case Studies

The SWOT analysis method is the situation analysis method. It was proposed by Weirik, a professor of management at the University of San Francisco in the early 1980s. It is often used in enterprise strategy formulation, competitor analysis and other occasions including analysis of S trengths, W eaknesses, O pportunities, and T hreats. Therefore, the SWOT analysis is a method that comprehensively summarizes the various aspects of the internal and external conditions of the enterprise, and then analyzes the strengths and weaknesses of the organization, opportunities, and threats faced.

Through SWOT analysis, you can help companies to pool resources and actions in their strengths and where there are the most opportunities; and to make their strategy clearer.

Edit this Diagram

What is a SWOT model

The analysis of strengths and weaknesses focuses on the strength of the company itself and its comparison with competitors, while the opportunity and threat analysis focus on changes in the external environment and possible impact on the company. In the analysis, all internal factors (i.e., strengths and weaknesses) should be grouped together and then evaluated by external forces (opportunities and threats).

Internal Factors (Strengths and weaknesses)

The analysis of strengths and weaknesses (S-W) of internal conditions is an internal method of assessment. The main purpose is to confirm the relationship between expertise and ability of the organization’s internal conditions. The strengths and weaknesses of its internal conditions are internal factors that the organization can control, including financial resources, technical resources, research and development, organizational culture, human resources, product characteristics, and marketing resources.

External Factors (opportunities and threats)

With the rapid development of economy, science and technology and many other aspects, especially the acceleration of globalization and integration of the world economy, the establishment of global information networks and the diversification of consumer demand, the environment in which companies are located are more open and volatile. This change has had a profound effect on almost all businesses. Because of this, environmental analysis has become an increasingly important corporate function.

The Opportunity and Threat (O-T) analysis is a method of evaluating the external environment. The main purpose is to confirm the relationship between the competitions of the industrial environment outside the organization. The opportunities and threats of the external environment are external factors that cannot be controlled by the organization, including factors such as competition, politics, economy, law, society, culture, science and technology, and demographic environment.

What is a Competitive Advantage?

Identifying attractive opportunities in the environment is one thing, and having the necessary competency to succeed in an opportunity is another matter. Each company must regularly check its strengths and weaknesses. When two companies are in the same market or they all can provide products and services to the same customer group, if one of them has higher profitability or profit potential, then we think that the company has a higher competitive advantage than the other. In other words, the so-called competitive advantage refers to a company’s ability to surpass its competitors, and this ability helps to achieve the company’s main goal – profitability. However, it is worth noting that competitive advantage is not necessarily fully reflected in higher profitability, because sometimes companies prefer to increase market share or employees.

Competitive advantage can refer to any superiority in the eyes of a consumer or its product in comparison with its competitors. It can be the breadth of the product line, the size, quality, reliability, suitability, style, and image of the product and services. Although a competitive advantage refers to a company that has a stronger overall advantage than its competitors, it is more meaningful to specify in which area the company has an advantage, because only in this way can we foster strengths and avoid weaknesses, or we can defeat the weakness.

Since the enterprise is a whole and the sources of competitive strengths are very extensive, it is necessary to make a detailed comparison between the company and its competitors from the aspects of the entire value chain when analyzing the strengths and weaknesses. Such as whether the product is novel, whether the manufacturing process is complicated, whether the sales channel is unimpeded, and whether the price is competitive. If an enterprise’s advantage in one aspect or several aspects is the key success factor that a company in the industry should have, then the enterprise’s comprehensive competitive advantage may be stronger. It should be pointed out that to measure whether a company and its products have a competitive advantage can only stand on the perspective of existing potential users, rather than stand on the perspective of the company.

In the process of maintaining a competitive advantage, enterprises must profoundly understand their resources and capabilities and take appropriate measures. Because once a company has a competitive advantage in one aspect, it is bound to attract the attention of competitors. Generally speaking, after a period of hard work, the company establishes a certain competitive advantage; then it is in a situation to maintain this competitive advantage, and competitors start to respond gradually; and if the competitors directly attack the advantage of the company, or Taking other more powerful strategies will weaken this advantage.

The main factors affecting the duration of a company’s competitive strengths are:

• How long does it take to establish this advantage?
• What are the advantages to be obtained?
• How long does it take for a competitor to make a strong reaction?

If the company analyzes these three factors clearly, it will identify itself in establishing and maintaining its competitive advantage.

The company should not correct all its weaknesses, nor should it make use of all its strengths. The main question is whether the company should be limited to the opportunities it already has, or whether it should acquire and develop some strengths to find better opportunities.

SWOT Analysis Strategies

In the process of adaptability analysis, enterprise top management should be based on the determination of internal and external variables, using leverage, inhibitory, vulnerability, and problematic four basic concepts to analyze this model.

• Leverage (S + O).  Leverage effects arise when internal and external opportunities are consistent and adaptive to one another. In this situation, companies can use their internal strengths to pick up external opportunities and fully integrate opportunities and strengths. However, opportunities are often fleeting, so companies must sharply capture opportunities and seize the opportunity to seek greater development.
• Inhibitory (W + O).  Inhibiting means impeding, preventing, influencing and controlling. When the opportunities provided by the environment are not suited to the internal resource advantages of the company, or cannot be overlapped with each other, the strengths of the enterprise will no longer be realized. In this situation, companies need to provide and add certain resources to promote the transformation of internal resources and weaknesses into strengths to cater to or adapt to external opportunities.
• Vulnerability (S + T).  Vulnerability means the decrease or decrease in the degree or intensity of strengths. When environmental conditions pose a threat to the company’s strengths, the strengths cannot be fully exerted and ending up with a fragile situation. In this situation, companies must overcome the threats to take advantage of them.
• Problematic (W + T).  When the company’s internal weaknesses and corporate external threats meet, companies face severe challenges. If they are not properly handled, they may directly threaten the survival of the company.

Steps for Conducting SWOT Analysis

• What is the current strategy?
• Confirm the changes in the external environment of the company (Porter 5 force or PEST)
• According to the company’s resource mix, confirm the company’s key capabilities and key constraints.
• Construct the SWOT Matrix by placing each one of already identified factors. This is an excellent graphic presentation of what is good and what is bad in your company, and what you can expect as an opportunity or threat.
• Define SWOT Strategies
• Choose what strategy to be adopted and determine the future direction and improvement actions to be taken

Case Study 1: Amazon SWOT Analysis

Amazon Detailed SWOT Analysis

• Brand Identity: Amazon is synonymous with online sales services, and Amazon focuses on improving customer satisfaction during the business process.
• Pioneer advantage: Amazon is undoubtedly the leader in the online retail industry.
• Cost structure: Amazon effectively uses its cost advantage, operates on thin profits, and is still profitable in trading.
• Business Development: Amazon continuously improves its service level and provides diversified services.
• Low-profit margins: Amazon has a very thin profit margin to maintain its cost-leading strategy. But low-profit margins make companies vulnerable to external shocks and crises, as well as other market changes.
• Seasonality: There is a seasonal difference between Amazon’s revenue and business scope, with sales and revenue peaking in the fourth quarter of each year.

Opportunity

• Today’s diversification of e-commerce business
• Continues to increase awareness of its own branded products and services.
• Amazon develops more local websites to participate in the international market. With the international expansion of Amazon, some local businesses have the opportunity to enter the international market.
• Promoting the strategic cooperation between Amazon e-commerce and its related affiliated industries will drive positive development of the industry
• Loss of profits due to low-profit margins
• Patent infringement and other aspects of Amazon’s litigation
• E-commerce industry barriers to entry barriers
• Cybersecurity issues

Amazon – Recent Development

What do you need to do next after you understand strengths and weaknesses and identify opportunities and threats? Let us take a look at how Amazon has seized the opportunity to successfully transform itself from an e-commerce company into a global leading technology company! When Amazon realized the limitations of the retail industry, it expanded its business boundaries promptly. In addition to cloud computing and smart voice, Amazon has also contacted third-party platforms such as logistics and suppliers, and even invested in the film and television industry, making its business model more diversify. In 2008, Amazon realized that content can attract and extend users’ time on the platform, and began to provide original content on Prime Instant Video, Amazon’s mainstream media video platform, and as part of the Prime membership service. Amazon’s ecology can be described as a rotating flywheel. This flywheel is centered on Prime’s membership system, and new interests have been added to it, gradually creating an all-encompassing ecology. While continuing to attract new users, it has promoted the development of Amazon’s e-commerce and other new businesses, and it will continue to do so.

Case Study 2: Starbucks SWOT Analysis

• Strengths – The Starbucks Group has strong profitability, with 2004 revenue exceeding $600 million.
• Weaknesses – Starbucks is known for its continuous improvement and innovation. (Translator’s Note: It can be understood as the instability of the product line)
• Opportunity – The launch of new products and services, such as the sale of coffee at the show.
• Threats – rising costs of coffee and dairy products.

Starbucks Detailed SWOT Analysis

• Starbucks Corporation is a very profitable organization, earning more than $600 million in 2004. The company generated revenue of more than $5000 million in the same year.
• It is a global coffee brand built a reputation for fine products and services. It has almost 9000 cafe shop in almost 40 countries.
• Starbucks was one of the Fortune Top 100 Companies to Work For in 2005. The company is a respected employer that values ​​its workforce.
• The organization has strong ethical values ​​and an ethical mission statement as follows, ‘Starbucks is committed to a role of environmental leadership in all facets of our business.’
• Starbucks has a reputation for new product development and creativity. However, they can vulnerable to the possibility that their innovation may falter over time.
• The organization has a strong presence in the United States of America with more than three-quarters of its cafe shop located in the home market. Some people think they need to invest in different countries (national portfolios) to spread business risks.
• The organization is dependent on a main competitive advantage, the retail of coffee. This could make them slow to diversify into other sectors should the need arise.

Opportunities

• Starbucks is very good at taking advantage of opportunities. E.g. In 2004 the company created a CD-burning service in their Santa Monica (California USA) cafe with Hewlett Packard, where customers created their music CD.
• New products and services that can be retailed in their cafe shop, such as low price products.
• The company has the opportunity to expand its global operations. New markets for coffee such as India and the Pacific Rim nations are beginning to emerge.
• Co-branding with other manufacturers of food and drink and brand franchising to manufacturers of other goods and services both have potential.
• Who knows if the market for coffee will grow and stay in favor with customers, or whether another type of beverage or leisure activity will replace coffee in the future?
• Starbucks is exposed to rises in the cost of coffee and dairy products.
• Since its conception in Pike Place Market, Seattle in 1971, Starbucks’ success has to lead to the market entry of many competitors and copycat brands that pose potential threats.

Case Studies 3: Coca-Cola SWOT Analysis Example

Coca-Cola Detailed SWOT Analysis

• Most sponsored corporate partners.
• Spread across the world in 650 languages ​​and regions.
• The market territory spans nearly 200 countries on five continents.
• To develop new products, the Coca-Cola Company not only sells cola but also other types of beverages.
• Coca-Cola has a long history, so it has a certain status in the market.
• There is no certain integration and the common goal of strategic management.
• The failure to develop new tastes.
• The gradual transfer of customer loyalty.
• Loss of market development opportunities.
• Sponsor the Olympic Games, use this opportunity to replace their brands, products, and make advertisements, especially The Olympic Games is a worldwide movement that allows the world’s population to recognize this product, expand its market reach, and raise awareness of its products.
• Participate in the World Cup, take this world-wide activity to pave the way for your products and gain popularity.
• Enter the Chinese rural market.
• Enter the American film market.
• Pepsi is Coca-Cola’s biggest competitor
• The products produced by the company may not be favored by young people today.
• Coca-Cola is not considered to be good for health by many people

Formulating Actions for SWOT Analysis

Having completed a SWOT Analysis, so what’s next? Is this enough to conduct the SWOT analysis? You need to know when you are analyzing that at the end of the process you need to expect future directions for next actions. Here is an example of formulating actions for a SWOT analysis:

Disclaimer : This case study has been compiled from information freely available from public sources. It is merely intended to be used for educational purposes only.

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