Lecture Notes: SWOT Analysis and Application to Amazon

Introduction

Discussed the concept of SWOT analysis as a strategic planning tool.
SWOT evaluates a company's competitive position and helps in strategic planning.
Analyzes both internal and external factors, focusing on current and future potential.
SWOT Acronym:
- S: Strengths
- W: Weaknesses
- O: Opportunities
- T: Threats

Strengths and Weaknesses: Internal factors analyzing the business's current position.
- Positive aspects are considered strengths.
- Negative aspects are considered weaknesses.
Common Elements to Assess:
- Financial Position: Revenue and profit trends.
  - Rising revenue/profit is a strength.
  - Declining revenue/profit is a weakness.
- Market Position: Market share and business valuation.
  - Growth in these areas is a strength.
  - Decline is a weakness.
- Customer Perception:
  - Brand recognition, customer loyalty, strong reputation with stakeholders.
  - Positive perception is a strength.
  - Negative perception is a weakness.

Opportunities and Threats: External factors impacting the future potential.
PEST Analysis:
- Political, Economic, Social, Technological, Legal, Environmental changes.
Example: Legal factors like the sugar tax affecting Coca Cola.
- Viewed as either an opportunity (sales of zero sugar range) or a threat.

Encouraged to create own SWOT for Amazon before reviewing example.
Amazon's Strengths:
- Brand Awareness: Recognized household name across demographics.
- Huge Revenues: $232 billion in 2018, leading in product distribution and smart speaker market (Alexa).
Amazon's Weaknesses:
- Lack of Physical Presence: Relies heavily on online business.
- Employee Treatment Perception: Negative stories affecting brand image.
- Low Margins: In some categories to stay competitive.
Opportunities for Amazon:
- Increase physical stores, acquire businesses/competitors, expand in developing markets.
Threats to Amazon:
- Government scrutiny and potential regulation.
- Competitor strategies and increased competition.

SWOT is a planning tool for analyzing strengths, weaknesses, opportunities, and threats.
Internal analysis focuses on current business metrics like revenue and market share.
External analysis considers uncontrollable factors that could impact the business.
Example of Amazon highlights its strengths, weaknesses, opportunities, and threats.

Amazon's strong market position and strengths could allow it to dominate globally.
Importance of handling weaknesses and threats while capitalizing on strengths and opportunities.