Monday, March 16, 2009

Compare Apples And Oranges For Robust SWOT Analysis

Article Summary
This article from Competitive Intelligence Magazine discusses how a health insurance company (Company A) conducted a SWOT analysis on a competitor that was a healthcare conglomerate (Company B). At first Company A wanted to conduct a SWOT analysis on Company B’s health insurance division. This approach according the author was comparing apples-to-apples. The team hired by Company A instead, conducted a SWOT analysis on the elements of Company B’s entire conglomerate, such as smaller companies and a bank acquired by Company B, their medical databases.

By using the SWOT technique Company A, expected to find “the secret sauce” of their competitor’s success in the market they were competing in. From a competitive perspective the SWOT analysis technique is suppose to give insight into a rival's position in the market. The strengths according to the article is an in-depth analysis of how a rival functions, the weaknesses can be that a company misses key elements of a rival's operation. Company A from the article wanted to only perform SWOT on Company’s B health insurance division and not its entire conglomerate. Although the article does not give a step-by-step approach to SWOT the author also emphasized the first step to conducting a SWOT analysis on a competitor should be to develop multiple hypotheses as oppose to simply gathering information about a competitor and then trying to put together a big picture analysis.

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