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SWOT Analysis with real Examples: Importance of swot analysis

Importance of SWOT analysis

SWOT Analysis is a framework that tells the competitive position of your company. In a market as competitive as today, you always need the best strategy possible. Only then you can stay ahead in your game. 

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SWOT Analysis consists of both internal and external components. While also telling you about ongoing and future prospects and possibilities.

SWOT Analysis is completely navigated by data and facts. It gives you a clear insight of your company’s strengths and weaknesses. This will help you to always incorporate all the necessary changes in real time. 

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S – Strength

W – Weakness

O – Opportunity

T – Threat

This is what SWOT stands for. Now, let’s discuss every single one of these individually for a much better understanding.

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Strength

Your organization’s strength is everything you do right. Everything that brings you results – profits, engagement, sales, positive sentiments. It can be anything. You should always try to make your strengths more powerful and effective. 

It’s also something that separates you from the entire competition. It’s necessary to be a little different. It’s a good thing to not be a part of a herd. That’s how people notice you, differentiate you from the rest of the lot. 

If you want to build a brand, and not just a company, you should always focus on your strengths. A strong brand gives you a strong and loyal customer base – a positive community.

Weakness

Something stopping your organization from reaching its full potential is a weakness. You should focus on these areas extensively. Trying to solve these hurdles as soon as possible should be your top most priority. If you want to survive in this competitive field, try to minimize your weaknesses.

Weaknesses will never let you build a strong brand. It’s important to constantly identify and address your weaknesses. Your customer base should always see you as a brand that wins their battles. Never as someone who gives up easily as soon a challenge arises.

Opportunity

Anything that can help you expand the footprint of your company is an opportunity. Opportunities arise in various ways. It’s important to always be on the lookout for opportunities. And take all the advantage you can out of them.

For example, consider you’re a smartphone company. And a country cuts down taxes on imported tech products, it is an opportunity. You can export your product to this new country and start building a new customer base. While enjoying the benefits of paying lower tax rates.

Threats

Threats are aspects that can cause harm to your company and your brand. You should always try to minimize your losses as much as possible. Identify threats and fight them upfront.

Be it lower sales, negative sentiments about your brand in the market. A failed product or service, or a new and better competitor brand. A lot of things can be a threat to your organization.

Now that we understand what SWOT Analysis is, let’s dive deeper with some real examples. It will help you understand how exactly you can use SWOT to your advantage. 

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SWOT Analysis of TATA Motors

In this growing race of automobiles, TATA Motors need no introduction. They have a very strong foothold in the Indian Market. It is currently the 3rd largest car manufacturer company in India. Right behind Maruti Suzuki and Hyundai

Market share of Hyundai is constantly declining. TATA Motors will soon become the 2nd largest automobile company in India. Let’s deep dive into their SWOT Analysis and see what they are doing right.

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Strength in SWOT Analysis of TATA Motors –

  • A deeply versatile portfolio of products. Tata has products in almost every range according to the Indian Market.
  • TATA is a very prominent name in the world. This brand recognition helps them establish themselves in Indian and other neighboring countries.
  • A very large number of employees. Around 80,000 employees work under TATA Motors only. While the TATA group has over 800,000 employees.
  • They have an active supply chain and over 1600 workshops that cover almost 90 percent of the country.
  • The company spends an estimated 23 percent of its budget on R&D. This proves that the brand focuses on growth.

Weakness in SWOT Analysis of TATA Motors – 

  • TATA Motors has a fairly broad portfolio of products. But it is struggling to penetrate the luxury market. It’s basic – As the price of the car goes up, so does the profit. This results in high operational costs and a lower rate of profit.
  • The acquisition of brands like Jaguar and Landrover was very successful initially. But now more players like Audi, BMW, Mercedes have entered the Indian Markets. TATA is struggling to keep up with them.
  • TATA is yet to tap the sea of International Markets on a global scale. While they do sell their cars in a few other countries than India, their footprint can surely be bigger.
  • While the company spends a hefty amount of money on R&D, they are still criticized for their lack of innovation. At Least when it comes to comparing them to their competitor brands.

Opportunities in SWOT Analysis of TATA Motors –

  • TATA Motors can tap into the potential of digital marketing. The way they reach new customers everyday. They can increase their customer base, and reach their target audience better. 
  • Their current supply chain system is one of their strengths. It doesn’t mean there is no room for improvement. They should constantly focus on expanding their supply chain. Only then they can compete with the likes of Maruti Suzuki and Hyundai.
  • TATA Nano was a complete failure in the Indian Market. Its production shut down back in 2018. TATA Motors can try to implement this model in other countries and see how successful it can be. Afterall, who doesn’t want an affordable car?
  • TATA Motors keeps merging and acquiring new brands every now and then. They should keep up with this pattern, and always be on the lookout for potential brands they can buy. 

Threats in SWOT Analysis of TATA Motors –

  • They are always criticized for their lack of innovation. This gives their competitors an edge. They seem to be rigid, and are always the last ones to adopt advanced features and technologies.
  • Pandemic has proven to be lethal for not just humans, but also for the entire economy of the world. A lot of employees lost their jobs, and this resulted in lower productivity rates. While the sales rates were already on record low.
  • Price is an area where TATA Motors gets most of the slack from its customers. Their competitors almost always seem to be offering better features. While also undercutting the price. This increases the negative sentiments around the brand. Swaying their potential customers towards the products of the competitor brands.

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SWOT Analysis of Amul

Amul, is an acronym for Anand Milk Union Limited. It is the largest manufacturer of Indian milk and dairy products. This brand is truly an iconic one in India. 

Fun fact – Amul distributes over one million liters of milk everyday in India alone. That’s a very big number.

Now, let’s dive into the SWOT Analysis of Amul, so we can see what makes it as big as it is today. And what areas it needs to look out for.

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Strength in SWOT Analysis of Amul –

  • Amul has grown aggressively over the last few decades. The company is on a mission to revolutionize the entire dairy industry. This is why they invest heavily in new technologies. It helps them to always stay ahead of the curve.
  • Amul is one of the largest dairy product manufacturers of the world. So, it’s not surprising that Amul has a gigantic production capacity. It helps them to have a strong foothold and a large consumer base in the market.
  • Amul is one of the most iconic and easily identifiable brands in the country. The Amul Girl, Amul’s mascot is a very old one, and is still featured along many Amul products till date.
  • Amul quality is simply unparalleled. They try to provide the best quality possible with each of their individual products. And they do it while keeping the price range affordable for Indian consumers. It’s not wrong to say that it’s a truly Indian brand, for Indian people.

Weakness in SWOT Analysis of Amul –

  • It’s no surprise that a company as large as Amul runs on a very high operational cost. Everything needs to run in a systematic manner. Every added process for manufacturing a product makes the cost higher. If there is ever a lack of demand for Amul products, Amul will need to face very high margins of loss.
  • Amul has a very large portfolio of dairy products, such as milk, ghee, cheese, ice cream and so much more. Not every product has a very strong footprint. For example, Amul chocolates manage to take a very small chunk of the Indian Chocolate market. Amul fails to compete with brands like Cadbury, Nestle, etc.
  • Amul has also created negative buzz around its image. This is because of the lawsuits filed against them. In 2017, Hindustan Unilever Limited (HUL) won a lawsuit against Amul. Amul was trying to tarnish their image through their marketing campaigns.

Opportunities in SWOT Analysis of Amul –

  • India is a developing nation. Both the economy and population are growing. So are the milk needs of its people. Amul needs to strategically increase its manufacturing capacity. This is necessary if they want to acquire the new growing customers.
  • Amul does import to some international markets. But there is still scope for a lot of growth and expansion. Amul needs to focus on untapped markets with their economical products.
  • Amul already has a successful supply chain and strong distribution network. They need to invest thoroughly in R&D to come up with new products and expand their portfolio. And they can use their vast distribution network to make it reach new consumers.

Threats in SWOT Analysis of Amul –

  • Amul’s market share is much higher than the competition. It doesn’t mean that the competition isn’t gearing up. New players are constantly entering the market. And each one takes a little chunk of Amul’s market share.
  • Another threat is the constantly growing trend of veganism worldwide. Everyday, people are renouncing dairy products in favor of new dairy-free alternatives. And due to this, more brands are emerging with newer vegan products to tap into this newly formed market. This can be a threat to not just Amul, but every brand that has a portfolio around dairy products.

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SWOT Analysis of Cadbury

It won’t be surprising that even the mention of Cadbury brand made you crave for a bar of Dairy Milk. Go get yourself on from the refrigerator. Right now, we won’t judge.

Well, coming back to the topic, Cadbury is one of the leading confectionery brands in the world right now. They have a wide portfolio of chocolate bars. And other recognizable products like Oreo Biscuits. Cadbury has a truly international presence. 

Now, let’s break down Cadbury according to the SWOT Analysis.

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Strength in SWOT Analysis of Cadbury –

  • Cadbury is a very prominent brand in the international market. Its influence is all across, as newcomers keep trying to imitate their success model. Having a strong brand presence all across the globe is their greatest strength.
  • Mondelez International is the parent company that owns Cadbury. Along with many other significant brands under its umbrella. It made a towering $28.72 Billion revenue in 2021. So, it goes without saying that Cadbury is flush with cash. They make large profits that can improve their R&D, and launch new products or even an entire brand.
  • Cadbury has a presence in almost 50 countries around the globe. It has a very prominent presence in each of these countries. The quality and taste of their products is very recognizable. When someone buys a Cadbury product, there’s a 99% chance that they already know what it’s going to taste like. What it means is they don’t just have a global footprint, but also amazing brand recognition.

Weakness in SWOT Analysis of Cadbury –

  • Cadbury does has a significant amount of products in their portfolio. They are yet to expanded beyond confectionery. People are getting more and more health conscious every day. And confectionery products don’t have a very positive healthy image in the market. If the confectionery market ever faces a downfall, their entire brand is going down. There would be no products that can serve as their saving grace in those tiring times.
  • They have garnered a lot of negative publicity due to their numerous product recalls. This puts their brand reputation in a very negative limelight. They had to recall their products because they labelled them allergen free. While a small amount of nuts were present. It’s a good thing that they took those product batches off the market. But, when you’re a large-scale business, you can’t afford to make mistakes like this.

Opportunities in SWOT Analysis of Cadbury –

  • There’s no denying that Cadbury has a very significant presence in India. But there is still a lot of untapped rural market that they need to explore. They can focus on having a stronger footprint in these areas of the country. Same goes for other developing or underdeveloped nations. These emerging markets are a huge opportunity for Cadbury, if they tread carefully.
  • Not having products beyond the confectionary umbrella is one of their main weaknesses. They need to focus on expanding their product range thoroughly. They can also introduce a new lineup of health conscious confectionery products. This will appeal to a wider range of customers. It will help them diversify their current market stature.

Threats in SWOT Analysis of Cadbury –

  • Manufacturing and distribution prices are constantly rising. Every few quarters they seem to be soaring new heights. This creates a challenge for pricing the products in the end market appropriately. Because if you don’t increase the price, you take a loss on the profit margin. But if you do increase the price, you’re giving smaller brandsa chance to fill in the gap you’ve created.
  • The number of health conscious people is rising everyday. The debate of how unhealthy confectionery products are has never favored confectionery brands. The negative effects of sugar and processed food items on the human body cannot be go unseen. If this trend stays, decline in the consumption of confectionery products is inevitable.

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Conclusion

As we can see, the SWOT Analysis framework is a very comprehensive study of a brand. It is very helpful if your brand seems to be struggling in the current markets. Or you simply want to see what are the areas you can improve upon. 

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A comprehensive SWOT Analysis will make you see the bigger and clearer picture. You can use this to improve your brand’s strategies and internal operations. And keeping the weakness and threats as low as possible.