New venture opportunity and SWOT analysis paper

This week we will study the SWOT analysis in detail. This week's paper is required to be approximately 4 -6 pages in length, not including the title page and the reference page. No paper should be fewer than 1400 words.

For this assignment you will invent a new business.

Make up the business, the location, the client base, and the product or service. Do not use any real company. You may review a real company's website for ideas, but the basis of this paper should be your own ideas.

Your introduction should include a description of your company and any details that are important to the reader.

The description of your company should be about one page long and a summary of the business. The other details can be discussed when you are reviewing each of the SWOT elements.

The final goal of this paper is to prepare a SWOT analysis of your new venture company.

After developing your new venture and describing it thoroughly in the beginning of your paper, provide a thorough SWOT analysis. Make sure you have included the actual SWOT analysis quad chart listing the strengths, weaknesses, threats, and opportunities. You can use your own chart, but your paper should include a simple SWOT chart with the four segments.

Use the simple quad chart on page 73 as an example. Then, you must discuss each segment thoroughly and explain what you have learned from performing your analysis.

So, your paper should include a title page and a reference page (no abstract is required):

1 - a description of your new venture (have a clear introduction)

2 - using the quad chart on page 73 as a sample include a simple quad chart with the four basic quadrants

3 - a thorough explanation of what you have learned from the analysis, further defining the strengths, weaknesses, opportunities and threats.

4 - an evaluation - based on what you have learned, will you continue your business venture?

Page 73 :

The combination of low production costs and an early-mover advantage in an environment where demand for CD-based phone books was growing rapidly seems to indicate that ProCD founder James Bryant had a golden opportunity. But the SWOT analysis did not reveal how to turn those strengths into a competitive advantage, nor did it highlight how rapidly the environment would change, allowing imitators to come into the market and erode his first-mover advantage. Let's look at some of the limitations of SWOT analysis.

Strengths May Not Lead to an Advantage

A firm's strengths and capabilities, no matter how unique or impressive, may not enable it to achieve a competitive advantage in the marketplace. It is akin to recruiting a concert pianist to join a gang of thugs-even though such an ability is rare and valuable, it hardly helps the organization attain its goals and objectives!

Similarly, the skills of a highly creative product designer would offer little competitive advantage to a firm that produces low-cost commodity products. Indeed, the additional expense of hiring such an individual could erode the firm's cost advantages. If a firm builds its strategy on a capability that cannot, by itself, create or sustain competitive advantage, it is essentially a wasted use of resources. ProCD had several key strengths, but it did not translate them into lasting advantages in the marketplace

Strengths May Not Lead to an Advantage

A firm's strengths and capabilities, no matter how unique or impressive, may not enable it to achieve a competitive advantage in the marketplace. It is akin to recruiting a concert pianist to join a gang of thugs-even though such an ability is rare and valuable, it hardly helps the organization attain its goals and objectives!

Similarly, the skills of a highly creative product designer would offer little competitive advantage to a firm that produces low-cost commodity products. Indeed, the additional expense of hiring such an individual could erode the firm's cost advantages. If a firm builds its strategy on a capability that cannot, by itself, create or sustain competitive advantage, it is essentially a wasted use of resources. ProCD had several key strengths, but it did not translate them into lasting advantages in the marketplace

SWOT Gives a One-Shot View of a Moving Target A key weakness of SWOT is that it is primarily a static assessment. It focuses too much of a firm's attention on one moment in time.

Essentially, this is like studying a single frame of a motion picture. You may be able to identify the principal actors and learn something about the setting, but it doesn't tell you much about the plot. Competition among organizations is played out over time. As circumstances, capabilities, and strategies change, static analysis techniques do not reveal the dynamics of the competitive environment. Clearly, ProCD was unaware that its competitiveness was being eroded so quickly.

SWOT Overemphasizes a Single Dimension of Strategy

Sometimes firms become preoccupied with a single strength or a key feature of the product or service they are offering and ignore other factors needed for competitive success. For example, Toyota, the giant automaker, paid a heavy price for its excessive emphasis on cost control. The resulting problems with quality and the negative publicity led to severe financial losses and an erosion of its reputation in many markets.

SWOT analysis has much to offer, but only as a starting point. By itself, it rarely helps a firm develop competitive advantages that it can sustain over time.

Sources: Shapiro, C. & Varian, H. R. 2000. Versioning: The Smart Way to Sell Information. Harvard Business Review, 78(1): 99-106; and Picken, J. C. & Dess, G. G. 1997. Mission Critical. Burr Ridge, IL: Irwin Professional Publishing.

The textbook reference is:

Dess, G. G., Lumpkin, G. T., & Eisner, A. B. (2014). Strategic management: Text and cases.