Market analysis fundamentals and applications

¶ … Company Is One That Is:

Achieving its stated financial and strategic objectives is an above-average industry performer is evidencing growth in firm's sales and market share is Positively viewed by shareholders and customers

Shows Continuing improvement in operating performance (Thompson et al., 2006)

The problem is that immersed in the hurly-burly of routine existence, a company may be unaware of its objective performance; it may under -- or -- over-estimate its results and character of operations. This is where a SWOT analysis comes into play.

The SWOT strategy helps us analyze factors for improvement within the company. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. Filling in these categories requires research into the company in question, but the more intensive and comprehensive this research, the better we can answer the question and work towards designing a prospectus for improvement.

The SWOT also tells us how well the company's strategy is working and whether any factors need to be revised (Thompson et al., 2006).

The SWOT sets the basis, or the blueprint, for business improvement -- it rounds out the character of the business, informs us about its state of health. The benchmark, on the other hand, is the secondary step in the improvement process.

Benchmarking involves analyzing quality, time and cost of factors that are involved in our business. We assess the state of these factors in terms of our business performance and contrast it to that of competitors. The SWOT sets the basis for benchmarking. For instance, if Weaknesses denote certain failings in one or more aspects we can analyze these three aspects - quality, time and cost -- to see whether any of these can be improved. Doing so, can modify Weaknesses. They may also work in ameliorating Threats.

As an example: Smithfield focuses on supplying consumer with good food: "good food is precisely what Smithfield Foods and its independent operating companies bring to tables around the world every day" (http://www.smithfieldfoods.com/). Smithfield Foods, Inc. is the world's largest pork producer and processor. Conducting a SWOT analysis would indicate that He Company has various strengths including that it is the world's largest pork producer and processor and has a reputation for philanthropy. The vertical integration of the industry, which has resulted in very limited purchasing of feed, machinery, and fuel from local sources, is strength (LaRue, n.d). On the other hand, weaknesses include its labor and legal issues such as a history of union disputes and engagement in illegal merger activity during its takeover of Premium Standard Farms LLC in 2006 (CNN. January 21, 2010.). Similarly, analysis would be done of its threats and opportunities. Threats are complaints about Smithfield and environmental issues and opposition to its expansion as well as growing legal policies on related environmental issues (LaRue, n.d.). Opportunities include the fact that Smithfield provides jobs and the recession makes this a welcome factor (ibid).