Change Implementation Techniques for Creating a Sense of Urgency

Technique 2.16 SWOT(T)

It provides a snapshot of where you are now (strengths and weaknesses) and suggests some future directions (opportunities and threats)

Notes:

i) S and W are internal or within the organisation while O and T are external or outside the organisation

ii) The (T) refers to trends that will have influence on the industry and organisation

iii) Handling O and T depends upon the organisation's S and W

Two examples of a SWOT

i) an Australian rural lobby group as seen by some branch members (Aurora, 2000)

Strengths

- almost 100% membership of industry

- united industry approach, ie spoke with one voice

- uniform policy

- established and recognised structure including officers, support staff and elected representation

- strong influence in the community

- single marking identity

Weaknesses

- allowing an alternative, competitive organisation to exist

- too many representatives on committees/board

- duplication and diversity of services between branches and head office

- future funding in doubt ( funding depended on voluntary levy)

- inadequate interaction between growers and organisation's representatives

Opportunities

- achieve hundred percent membership

- deregulation of the industry

- progressive reviews within the organisation

- form a political party

Threats

- dissolution of membership

- take over from another organisation

- government interference through legislation, especially in marketing

- economic viability of the industry

Trends

- erosion of political power base with population shifts to urban areas

- alternative and more profitable enterprises dictating different political and economic agendas

- move away from short-term "Band-Aid" solutions of symptoms to more handling of the real causes of problems

ii) Amazon in 2005 (Alexander Osterwalder et al, 2010)

Strengths

- extraordinary customer reach

- huge selection of products for sale

- excellent fulfilment (B2C, B2B, etc)

- excellent technology and content

Weaknesses
- low margins (owing to selling low-value, low margin products like books, music CDs and DVDs. Its net margin on sales was 4.2%; while Google's was 33.9% and eBay's 23.7%
Amazon handled the situation via a 2 pronged approach, ie

i) grow online retail business through a continuing focus on customer satisfaction and efficient fulfilment

ii) growth initiatives in new areas that satisfied the following conditions, ie

- enters an under-served markets

- be scalable with potential for significant growth

- leverage existing capabilities of Amazon.com to bring a strong customer-facing differentiation

Based on these criteria Amazon developed 2 new initiatives that built on the company's core strengths of order fulfilment and web IT expertise; both addressed under-service markets; both promised higher margins. These 2 initiatives were

i) Fulfilment by Amazon - allows individuals and companies to use Amazon.com's fulfilment infrastructure for their own businesses in exchange for a fee

ii) Amazon Web services - stores sellers inventory in its warehouses, then picks, packs and ships on the seller's behalf when the order is received. Sellers can sell through Amazon. com or their own channel or a combination of both. This targets software developers and others requiring high performance server capability by offering on-demand storage and computing capacity. Part of this involved

- Amazon Simple Storage System (Amazon S3) that allows developers to use Amazon's massive data centre infrastructure for their own storage needs

- Amazon Elastic Computer Cloud (EC2) that allows developers to rent servers which to run their own applications

Owing to its expertise, Amazon was able to offer both at low prices yet still earn a higher margin than from its online retail operations.

· Disadvantages of using SWOT include

- it treats an organisation in isolation from others in the same industry. For example, what may appear a weakness in one organisation can be exaggerated if all the other organisations in the same industry suffer the same weakness.

- it gives little indication of how an organisation should strategize.

- it is of limited use in situations where rapid decision-making and action is required.

A variation of SWOT is SPOT
S = strengths
P = problems
O = opportunities
T = threats

Another variation of SWOT is SOAR (strengths, opportunities, aspirations and results)

(sources: Graham Hubbard et al, 1996; John Forster, 2010)