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 Strengths, Weaknesses, Opportunities,
and Threats. 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.
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 analysing 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.

1. 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.
2. 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.
3. 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.
4. 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

1. What is the current strategy?
2. Confirm the changes in the external
environment of the company (Porter 5
force or PEST)
3. According to the company’s resource
mix, confirm the company’s key
capabilities and key constraints.
4. 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.
5. Define SWOT Strategies
 6. 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

Strength
1. Brand Identity: Amazon Is
Synonymous with Online Sales Services,
And Amazon Focuses on Improving
Customer Satisfaction During the
Business Process.
 2. Pioneer Advantage: Amazon Is
Undoubtedly the Leader in The Online
Retail Industry.
3. Cost Structure: Amazon Effectively
Uses Its Cost Advantage, Operates on
Thin Profits, And Is Still Profitable In
Trading.
4. Business Development: Amazon

Continuously Improves Its Service Level

And Provides Diversified Services.

Weakness
 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

Threat
 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 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 could
 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 centred 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.
