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The importance of SWOT analysis in identifying a company's strengths, weaknesses, opportunities, and threats. It provides an overview of the steps involved in conducting a SWOT analysis and how it can be used to guide business-strategy meetings. The document also highlights the significance of a global mindset when analyzing a company's internal organization and external environmental factors. It uses EZ-Pleeze as an example to illustrate how a SWOT analysis can help a company identify its strengths and weaknesses and make recommendations for improvement.
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Western Governors University Business Strategy – C B1. Every company has Strengths, Weaknesses, Opportunities, and Threats referred to as SWOT. Using a SWOT analysis helps a company identify the things they are good at and what they should improve. The function of a SWOT analysis is to look at a company’s internal/controllable factors and external/uncontrollable factors in order to devise a strategic plan for future growth, development, and success. Investopedia listed three main takeaways regarding SWOT analysis: SWOT analysis is a method used in strategic planning that also provides tools for assessment; Identifying key strengths, weaknesses, opportunities, and threats contributes to fact-based research, fresh insights, and creative thinking; and SWOT analysis works better when various organizational entities or perspectives are free to include objective data points rather than preset implications (Grant, 2020). A complete SWOT analysis contains both an internal analysis and external environmental analysis. Internal strengths and weaknesses are the things a company can control. When analyzing a company’s internal organization, one should use a “global mind-set” (Hitt, Ireland, & Hoskisson, 2015), meaning not on the traditions of a single country, society, or framework. The external opportunities and threats are outside the control of the company. The external environmental analysis has four parts: “scanning, monitoring, forecasting, and assessing” (Hitt, Ireland, & Hoskisson, 2015). It is essential to recognize, observe, project and foresee effects, and make changes to deal with environmental changes and trends. A SWOT analysis can be conducted in 8 basic steps. First, you need to determine the purpose of your SWOT analysis, such as identifying new product ideas or improving your current process. Secondly, examine your company, industry, and market, comparing your company to your competitors. Next, make a list of the strengths within your business. These could be financial stability, customer satisfaction, or strong employee relations. The fourth step is to list your internal weaknesses, things that put you behind your competitors or your industry. Then create a list of possible external opportunities that have presented themselves that you might need to take advantage of. Next is your list of potential outside threats that might create problems for your company. You might need to get ahead of these to prevent damage. Now you want to prioritize the most critical issues on these four lists. Finally, develop a plan to address these prioritized strengths, weaknesses, opportunities, and threats to maximize growth and development for your company (Business Queensland, 2020). A SWOT analysis is a great way to guide business-strategy meetings. SWOT analysis provides information in an easily understood format, allowing everyone in the room to discuss the core strengths and weaknesses of the organization and identify opportunities and threats. This powerful tool leads to easier brainstorming of ideas. Sometimes the SWOT analysis you anticipate before the session changes over time to represent factors that you were unaware of and would never have caught if not for the group feedback. A corporation may use a SWOT for general business planning sessions or for a particular segment such as marketing, manufacturing or sales. In this way, before committing to it, you can see how the overall plan built from the SWOT analysis filters down to the segments below. A segment-specific SWOT analysis, which feeds into an overall SWOT analysis, may also operate in reverse (Grant,
2020). EZ-Pleeze has been through several financial situations that have cost them confidence from their stockholders. As Tim Burnes, the founder, and CEO, steps down, this could be a perfect time for EZ-Pleeze to make changes to realign with their mission and vision statements of the company. A recommendation from a thorough SWOT analysis will start EZ-Pleeze on the right path of company improvement. B2. Strengths define what a company excels at and separates it from the competition: customer focus, strong employee relations, and advanced technologies, to name a few examples (Grant, 2020). EZ-Pleeze is notable for having a devoted connection with their customers. They need to use that connection to decide where they might want to expand their company. Their customer may desire other products that EZ-Pleeze could provide through their technology investments. EZ-Pleeze uses research and development to find out what the customer wants. This is an internal decision to improve their product choices to meet customer demand. Through consistent communication with the customer, EZ- Pleeze makes certain customer needs are being met through a diversified selection of potato and corn products. This is advantageous to the company as they have grown to supply “more than 50% of the largest fast food restaurant chains in the United States” (Western Governors University, n.d.). This may also lead to overseas accounts as the restaurants expand. EZ-Pleeze has invested in technology to meet consumer demand. This is an internal strength because EZ- Pleeze actually budgeted for these new technologies. The budget is agreed upon and approved by the board of the company. After learning “that consumers wanted healthy foods with great taste” (Western Governors University, n.d.), investing in the technology needed to make changes to their product preparation was a solid decision and will make EZ-Pleeze more competitive. EZ-Pleeze encourages employee professional development and growth. EZ-Pleeze chooses to invest in their employees through health and wellness programs. The company believes making an internal investment into their “biggest asset” (Western Governors University, n.d.) will enhance operations and efficiency. The advantages that this brings to the company is employee retention as they are able to make contributions through best practices and share their creative, new ideas. B3. Weaknesses hinder a company from operating at their optimum level. They are areas in which the company needs to change in order to stay competitive: a poor brand, higher than average turnover, high debt rates, insufficient supply chain or lack of resources are some examples (Grant, 2020). EZ-Pleeze should use this SWOT analysis to identify their weaknesses and be open-minded to recommendations for improvement. Poor financial decisions almost ruined the company in the past. Identifying the weaknesses and working to not repeat those decisions will strengthen the company. The prior development plan was for the processed food market , which is not currently in line with customer demand. This internal strategy put EZ-Pleeze behind the curve with customer satisfaction, giving strength to their competitors. EZ-Pleeze found themselves spending money on expensive marketing to try and compete with their
major threat. This will be a disadvantage to EZ-Pleeze in which they will have to work hard on multiple fronts to stay competitive. The cost of marketing to compete with other companies was $5 to $7 million a year. Marketing is a necessity; the cost of good marketing is an external issue. The high cost has certainly had a financial impact on the company. This has created several disadvantages for EZ-Pleeze such as financial decline and lack of stability and faith from investors. There was an increase in government regulations. Without government regulations, companies would not be held to consistent standards. But the cost to meet new regulations can be an external hardship to a company. Any financial hardship is another disadvantage EZ-Pleeze must overcome. B6. As a newly placed consultant for EZ-Pleeze, Annita S. Safi was tasked with conducting a SWOT analysis for EZ- Pleeze. After a complete and thorough analysis, she has suggested three recommendations to shift the business from its present state to a more promising future. The goal is for EZ-Pleeze to become a financially stable, a valued employer, and a leading company in multiple food products. EZ-Pleeze needs to improve its financial stability, building on the strengths of research and development to align products with customer demands. The company should utilize its strength of the technology it has already invested in to improve their products above competitors. A robust financial picture will allow stockholders to see company stability. With that stability, stock prices will improve, making the company more valuable. EZ-Pleeze needs to position the company in the community as a valued employer. While they state employees to be their "biggest asset," financial issues caused them to lay off many employees in the past. The layoffs were damaging to the company's reputation within the community and would be considered a weakness. As the company improves their economic status, they should choose to reinvest in the community by creating jobs. Their company image can also be established through community support in schools or food banks. Companies that support their communities will attract more business and support. EZ-Pleeze should utilize its research and development as well as technology to diversify its product line. The company should consider the needs of their customer and whether or not they can meet those needs with a differentiated product line. Investing in new products will also give EZ-Pleeze a diversified portfolio of products and service and would reduce risks associated with relying on a single product. For example, if the price fluctuates greatly in corn due to an unexpected shortage, EZ-Pleeze would have new products to fall back on. Customers often like the ability to get numerous products from the same source because it is easier than having several vendors. In conclusion, EZ-Pleeze is a stable company as the “fifth largest corn and potato products company in the United States” (Western Governors University, n.d.). Still, it has the capability of being more. There are many advantageous strengths in the company through technological advances and substantial employee investments. EZ- Pleeze should apply the recommendations discovered through this SWOT analysis to become the desired company of major stockholders, the employer of choice in the community, and diversify their product line to meet more customer needs. These recommendations will help EZ-Pleeze with its vision to move into the top three corn and
potato producers of the United States. This SWOT analysis will also realign EZ-Pleeze with its mission to provide high-quality products and investing in its employees. REFERENCES Business Queensland. (2020, June 15). Conducting a SWOT analysis. Retrieved July 22, 2020, from https://www.business.qld.gov.au/starting-business/planning/market-customer-research/swot-analysis/conducting Grant, M. (2020, March 02). How SWOT (Strength, Weakness, Opportunity, and Threat) Analysis Works. Retrieved July 20, 2020, from https://www.investopedia.com/terms/s/swot.asp Hitt, M. A., Ireland, R. D., and Hoskisson, R. E. (2015). Strategic management: Concepts, competitiveness and globalization. Cengage Learning. ISBN-13: 9781285425184 Western Governors University. (n.d.). EZ-Pleeze Food Company: Company and industry profile [Course artifact]. Available from https://my.wgu.edu/courses/course/5580001/course-material