Date of submission
Article Review SWOT analysis
In a competitive market, firms maximize on efficient utilization of scarce resources to produce quality product and services that satisfy the consumer’s tastes and preferences. Production efficiency of businesses builds a sustainable competitive advantage from market rivals – a factor that gives the company an opportunity to increase its market share and increase revenue. A firm needs to understand its strengths, weakness, market opportunities, and potential threats from competitors to most appropriate strategic plan that would help a firm to withstand market forces in the industry. The SWOT analysis is an environmental scanning technique used by companies to evaluate its competitive position in the industry. The approach aligns a company’s external and internal environmental factors, along the short-term and long-term objectives of the firm.
SWOT analysis is a critical approach attributable to a company’s ability to realize new market opportunities and explore new mechanisms such as innovative products that would propel its market penetration to an uncompetitive level. This conventional approach has been used by various multinational corporations in their endeavors to grow the customer base and advance in continued improvement of their products and services.
Summary of the article
Despite the remarkable results of the SWOT analysis approach, several critics have poked holes into the conventional nature of the technique and its disregard of other core influencing factors. In the article, SWOT Analysis from a Resource-based View, Valentin argues that the conventional SWOT analysis approach overlooks on the resource capabilities of a firm that would enable the business to retain its sustainability advantage. Further, the author claims that identifying companies' potential threats should be supplemented by alternative strategies that would help the firm strengthen its competitive strength for a long time (Valentin:54). The author points fronts that resources and capabilities are core factors attributed to a firm’s level of strengths and weaknesses. For instance, financial capacity and organization culture are rarely mentioned by the SWOT analysis mechanism yet they contribute immensely to a company’s effort to sustain its market competitiveness.
The article further criticizes the application of product differentiation strategy to in improving customer value and countering market rivalry. Instead, the author claims that firms ought to concentrate on developing policies and system since overreliance on the latter to increase the consumers switching costs reduces profitability (Valentin: 57)
How the article relates to the weekly reading content: pg 140: SWOT analysis: A traditional approach to internal analysis.
The article highlights the influence of rapid change in customer preference is critical to a company’s market sustainability regardless of whether there is the presence of potential market threats (Valentin: 58). Change in consumer taste is a factor that SWOT analysis approach has overlooked an exogenous threat to a firm ad. In summary, the author recommends a comprehensive defensive and offensive resource-based analysis to enable a firm understands and develops viable strategies for market performance.
Why you chose the particular topic and article
The essence of selecting the article is that it captures the attention of our understanding about SWOT analysis and further injects other factors that the conventional approach fails to address. A fascinating issue change in consumer taste noted as a universal threat to a firm in all market structures. Moreover, the topic seems to contradict the class discussion and for that reason it provides healthy debate on the long –term effectiveness of SWOT analysis technique.
The article slightly contradicts with the conventional SWOT analysis approach discussed in class thus providing a platform to evaluate how effective is the method in its current state and its relation to the proposed resource-based view SWOT analysis approach. The article is critical of the students and the teacher in helping delve further in justifying SWOT analysis effectiveness and the need for further improvement. A deliberative discussion in class will serve as the basis for accommodating or countering the authors' views based on tangible facts.
Conclusively, the article portrays that assessing firm’s competitive advantage is a critical aspect that demands a comprehensive internal and external environmental scanning of a firm. The slight contradiction of the conventional and resource based SWOT analysis approach pose a challenge to the student to ponder on the following question:
- Does the author’s proposition on resource-based SWOT analysis technique hold? Why?
- Based on your understanding and analysis, what factors are critical to consider in conducting a firm’s SWOT analysis?
Valentin, E. K. "SWOT analysis from a resource-based view." Journal of Marketing theory and Practice (2001): 54-69.