COMPETITOR ANALYSIS MATRIX
Competitive Information Business 1 Business 2 Business 3 Business 4
Products or services offered
Product strengths
Product weaknesses
Competitive advantage
Competitive disadvantage
other Competitive Information
The rivalry between business organizations having similar interest is a common
phenomenon. For the business to survive in the face of stiff challenge and to ensure its
sustained growth in that environment, the entrepreneur has to adopt certain principles
of managing competition. Some of them are
Spot early opportunities
Develop a deeper understanding of the customer - national and international
Keep track of the competitors
Identify current trends which would shape the future.
SWOT ANALYSIS
INTRODUCTION AND MEANING
The process of liberalization and economic reforms, while creating tremendous
opportunities for growth of many industries have also thrown up new challenges to the
industries. Building competitive strengths, technology up gradation and quality
improvement are the vital issues that need to be looked into, to build capabilities, to
withstand emerging pressures and ensure sustained growth.
The 21st century, would ensure a bright future for industries only if a conscious
and sincere effort is initiated for overcoming hardships faced. The entrepreneurs have
to lay more emphasis on the quality of their production. The gospel truth is, ‘Better
quality and Better productivity’. Therefore, entrepreneurs have to devote sufficient
attention on Research and Development. Innovation is the real step towards continued
progress.
To innovate, an entrepreneur has to make a diagnosis of the current situation.
The diagnosis of the current situation is done by conducting an Internal Analysis and
External Analysis.
Analysis of External and Internal Environment together is called SWOT Analysis.
SWOT Analysis refers to identifying the strengths, weaknesses, opportunities and
threats of an organization.
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SWOT Analysis is a tool, often used by organizations in planning its future. This
tool can be explained in a simplified manner as follows:
S - Strengths
of the organization
W - Weaknesses
O - Opportunities of the environment
T - Threats
The Internal Analysis of the organization will cover the organizational position
with respect to different functional areas like production, finance, marketing, R &
Distribution and so on. More specifically, this may look into a company’s sales volume,
market share, profitability and so on. This will reveal its strength and weakness.
The External Analysis will do the necessary scanning of the business
environment to identify any threat and opportunities posed on the company, its products
or services. More specifically, this will include the industry performance, competitive
activity and a review of the growth and decline of the user industries.
STRENGTHS AND WEAKNESS
Every business needs to evaluate its strengths and weaknesses periodically.
The management or an outside consultant reviews the business’s marketing, financial,
manufacturing and organizational competencies. In examining its strengths and
weaknesses clearly, the business does not have to correct all of its weaknesses nor
gloat about all of its strengths. They have to slowly overcome their weakness and
convert it into its strength.
Some of the strengths of an organization are:
a) Availability of necessary infrastructure
b) Adequate production capacity
c) Skilled manpower
d) Good manufacturing practices, quality assurance and quality control
e) Low cost of manufacture
f) Facilities for product and process development
g) Good location
h) Wide distribution network
i) Motivated staff
j) Liquidity position
k) Brand image
l) Consistency in earning profits
m) Good corporate image
n) Efficient management
o) Philosophy and human resource development
If an organization lacks any of these, it will obviously result into its weakness.
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Let us now look at some of the weaknesses of an organization:-
a) Rising cost of operations
b) Growing union pressures
c) Low level of motivation of staff
d) Non-availability of raw material
e) Scarcity of capital
f) Weak credit worthiness
g) Problem of under utilization of capacity
h) Outdated technology
i) Poor project planning
j) Inadequate infrastructure
k) Shortage of trained technicians
l) Insufficient managerial expertise
m) Unorganized nature of operations
n) Lack of effective co-ordination
o) Inadequate training in skills
p) Feeble structure/poor organization
q) Problems of delegation of authority
OPPORTUNITIES AND THREATS
An entrepreneur has to know the parts of the environment to monitor, if the
business is to achieve its goals. A business has to monitor key macro environmental
forces like demographic, economic, technological, political, legal, social and cultural
factors, and, also significant micro environmental forces like customers, competitors,
distribution channels, suppliers, etc. that will affect its ability to earn profits. The
business unit should set up a marketing intelligence system to track trends and
important developments. For each trends or development, management needs to
identify the implied opportunities and threats.
An opportunity is an area of need in which a company can perform profitably.
Some of the opportunities of an organization are:
a) Growing population
b) Increase in disposable income
c) Good monsoon
d) Easy availability of money
e) Availability of appropriate technology
f) Favourable government policies
g) Availability of different task environment like market information, distribution
outlets and media.
h) Presence of favourable cultural environment.
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Some developments in the external environment represent threats. An
environmental threat is a challenge posed by an unfavourable trend or development
that would lead, in the absence of defensive marketing action, to sales or profit
deterioration. Some of the threats of an organization are:
a) Shortage of power, water, fuel
b) Rejection by the market
c) Recession
d) Tough competition
e) Political instability
f) Fiscal policy resulting into increased taxes, duties, imports reservations, licensing
g) Technological obsolescence
h) Tight money market
i) High cost of raising finance and cost of finance
j) Resource crunch
k) Difficulty in retaining technical experts
l) Climatic changes
m) Changing customer tastes and preferences
n) Prolonged economic depressions
On completion of a SWOT Analysis, an organization can know ‘where it stands’.
Therefore, it can proceed to develop specific objectives and goals for the future.
ADVANTAGES OF SWOT ANALYSIS
The advantages for conducting a SWOT Analysis for innovating are
1. An entrepreneur can know in which field, there is demand, and, can venture into
the respective field, keeping their strengths in mind.
2. It helps in the development of new technology.
3. An entrepreneur can make an analysis as to develop a completely new product,
or to just change the existing product.
4. There can be improvements brought about in the process of production.
5. On the basis of information collected through SWOT analysis, the goals which
the firm wants to achieve in future can be decided.
6. Short term mission and long term mission of the organizations can be farmed.
7. Alternatives can be selected and decided to exploit opportunities and to face
threats in the environment.
8. Priorities can be given to different goals and the courses of action to achieve the
goals can be timed.
9. Plans can be formalized for effective communication & implementation of plans.
10. Major functions & sub-functions can be determined in achieving the objectives of
the firm.
11. Expansion of the range of services and benefits.
12. The social, political, legal, economic, technological factors can be analysed.
13. An analysis of the competitor’s strategies can be made and their policies can be known.
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CASE STUDY
To understand SWOT analysis better, let us look at a case study of SWOT Analysis
conducted in a five star Hotel in Bangalore:
The strengths of this five star Hotel are
1) It has got more than 95 years of experience
2) It has hotels in different places in India
3) It has many heritage properties which adds to its charm and represents Indian culture
4) It has a few low budgeted hotels, which caters to the needs of middle class tourists
5) It has hotels not only in big cities but also in small cities which are of tourist importance
The weaknesses are
1) It has tough competition form rivals, and hence their concentration is diverted.
2) It has very few low budget hotels, which are of need today.
3) It has more than one hotel in one city, which is a waste of investment.
Its opportunities are
1) There is availability of government support in the form of land and financing of projects.
2) There is an increase in the tourist inflow in India, India is expecting to receive 2.4 million
tourists, i.e., there will be lot of business.
Its threats are
1) Its competitors are also located near the hotel.
2) It has to face the threats of various resorts, which people are looking for now-a-days.
3) It also has threats from smaller hotels, which tourists prefer, because of cheaper rates
and almost the same kind of hospitality.
Therefore, this hotel has to overcome its threats and weaknesses and concentrate more on
its strengths and opportunities available.
LECTURE-9
VENTURE CAPITAL- CONCEPT, AIMS, FEATURES, FINANCING STEPS
SOURCES, CRITERIA TO PROVIDE VENTURE CAPITAL FINANCE
EXPORT & IMPORT POLICIES RELEVANT TO AGRICULTURE SECTOR
VENTURE CAPITAL
Origin and Evolution
The concept of venture capital is a relatively new phenomenon in the Indian
industrial scenario. It is a new financial service which facilitated the development of
new breed of entrepreneurs to start high-risk and high-technology projects for higher
returns. As the name suggests, it implies capital provided to start a new venture.
The origin of venture capital may be traced back to General Doritos who set up
the American Research and Development Fund (AR and D) at Massachusetts
Institute of Technology in 1946 to finance the commercial exploitation of new
technologies developed in universities in USA. This organization financed about 100
companies nearly for 11 long years and made its investment 35 times.
Allured by the performance of the AR and D, large companies in the USA like
Xerox, 3m and General Electric entered into the field of venture capital. The Japanese
suddenly followed the Americans and started venture capital division in their country.
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