SWOT Analysis Process Framework and Porter Value Chain

Analysis Process Framework

When analyzing a company, we should divide the analysis in two points: External and Internal. The focus of these analyses is to find their main Strengths, Weaknesses (internal analysis), Opportunities, and Threats (external analysis). After research we can finally build our SWOT analysis of the company.

External:

• Trends = PESTLE - allows the company to make specific choices when planning the company's future, from how the brand should be presented, to any changes within the structure of the company's organization, to the development of new products.
• Sector = Porter’s 5 forces - Analytical model used to help identify the structure of an industry, and to help companies determine their competitive strategies.

Internal Analysis:

Looks at everything that happens inside the company and that can affect it in a relevant way. Is a way of knowing how the firm is working and improving day by day.

• Activities: Aim to generate added value to the client. An activity only makes sense if it has value added! (value added is something that the customers are willing to pay for).
• Processes: Set of related activities, organized to achieve goals. As a manager, it’s important to know the boundaries and limits of your processes, since they can’t be arbitrary, and have to be defined according to the needs and requests of the customers.
• Systems: Set of related processes, organized to achieve goals (like a business segment).

Porter Value Chain:

Value chain is a collection of activities that are performed by a company to create value for its customers. Value Creation creates added value which leads to competitive advantage. Ultimately, added value also creates a higher profitability for an organization.

• Primary activities: inbound, outbound, production, mkt and sales, service.
• Secondary activities: firm infrastructure, Human resource mgmt., tech dvpmt, procurement.

Organizations use primary and support activities as building blocks to create valuable products, services and distinctiveness.