Monday, March 21, 2011

SWOT Analysis

Today, we further discussed about SWOT Analysis and processing it to be useful for decision making. After identifying the internal and external factors that may affect a business operation, positive and negative comments are made about these factors. The positive and negative comments are then grouped and totaled to get the net internal and external factor. This value is useful for making Grand Strategy Matrix that involves strength and weakness in the horizontal axis (strength as the positive value and weakness as the negative value)as well as opportunity and threat in the vertical axis (opportunity as the positive value and threat as the negative value). The values gotten from the net internal (horizontal axis) and external (vertical axis) factors are plotted in the matrix to form a coordinate.

- Positive External and Positive Internal factor result in Expansion strategy
Expansion is a company's attempt to allocate its resources to make the business bigger. There are basically two types of expansion strategy, concentration (can be vertical and horizontal) and diversification (concentric and conglomerate). Concentration is the expansion of a business in the same industry in the same (horizontal) or different (vertical) level of business activity, while diversification is the expansion of a business to a different industry with (concentric) or without (conglomerate) any similarity in the business type.

- Positive External and Negative Internal factor result in Stability
When a company wants to maintain its stability, then it should ensure that its present course is well run.

- Negative External and Negative Internal factor result in Retrenchment
This is the final stage of a company that doesn't have any other way out, that is, reducing the use of its resources in order not to worsen efficiency. There are several ways to do this, they are turnaround (making former product improvement), divestment (taking out current investment) or liquidation (liquidating assets to generate more cash AKA announcing bankruptcy!

- Negative External and Positive Internal factor result in Combination
This situation with unfavorable threat from the industry and the favorable strength of the company can be handled through the combination of several strategies simultaneously or sequentially to achieve its goals.

This analysis may help us in determining the present condition of our company, whether it is favorable or unfavorable and assist us in making the right decision and taking the right action. But of course, it depends on the type of business, its scale of operation and lots of other factors. In my opinion, this analysis is quite simple to conduct but should be supported with any other analysis such as product life cycle and value analysis.

Monday, March 14, 2011

Report and Discussion

Making a good report is every student's task, from scientific analysis to business plan. It is an essential part of our studies and that was why we were given some tips in making good report. Here they are:

1. simplicity, the report should be straight to the point of discussion
2. clarity, the language used should be clear and easily understood
3. accuracy, the facts presented should be from trusted source
4. completeness, the contents should meet the standards given
5. relevance, it should stick and always be related to the main topic
6. objectivity, use of formal language
7. brevity, there should be a brief description about the topic being analyzed
8. reader oriented, the language used should suit the targeted reader
9. appendix, support materials should be mentioned

These are the things that we can do to improve the quality of our reports. It will be very useful for us when we are making SWOT Analysis and Marketing Plan for our mid-term and final-term exams respectively.

After the discussion on making good report, then we went back on the theory. Today, we learned about SWOT and Context Analysis.

SWOT Analysis is a strategic planning method used to determine the strengths, weaknesses, opportunities and threats of a business venture. Strength and weaknesses are internal factors while opportunities and threats are external factors. For new comers like us, this method should be very useful in analyzing our competitors' as well as our ability in surviving the market we are going to get into. This way we can maximize the use of our strength and exploit the opportunities presented to us to earn success.

Context Analysis is a method to analyze the environment in which a business operates. This includes the economy of the country, technology, socio-cultural, regulatory and physical context. In my business subject in high school, I also learned a similar concept called PESTEL Analysis that covers the political, economical, social, technological, environmental and legal factors that can influence business activities. We need to be aware that these things can affect the planning or decision making of our business. For example, we can use the improvements in technology in getting better product quality and more effective, time efficient production rather than with the use of man power.

Even for a small scale business like ours, we need to take into account the external factors happening around us that can affect our business activities such as changing trading policy, environmental concern (e.g. global warming or waste) and changes in currency rates.

Monday, March 7, 2011

Questions for Industrial Association

Tomorrow, 2008 and 2009 THM students will have a talk show with the industry association leaders of tourism and hospitality businesses. Our lecturer, Mr. Sandy made us to create some questions regarding our business plan to be asked during the talk show.

Our business is in the food and beverage industry and we focus on providing packed snacks for events such as meetings and seminars, specifically marketed in the middle to upper class economy. We bring new concept in the snacks itself by creating innovative flavors and shapes through producing and bringing together innovative pastry products all around us.

So, here are the questions that we are going to ask tomorrow:

1. In your opinion, what is the most suitable price range and most strategic place to sell our product?

2. What pastry product is in the rise (getting popular) at the moment? Do you think our innovation may have the chance to get popular in the market as well?

3. What is the characteristics or profile of the target market that may be interested in our innovative product? Will it be the youngsters or elders? Do you think this target market will bring benefits to the company?

4. In the pastry industry, is product innovation more beneficial than innovation in packaging? Which one presents more potential?


These industry association leaders are experienced in their fields and may give us information, suggestions, helps and considerations in the planning of our business. The theory in class that we learn may not be the same with the current market condition and it may not also be enough to help us in making decisions. I am very excited for tomorrow's talk show and really looking forward to meet these leaders!