Swot analysis inside the software industry essay

I. Introduction

In the past 20 or so to thirty years many improvements and advancements have taken place in the software market which began during the sixties mainly in america of America and knowledgeable a revolutionary boom since the eighties (Steinmueller, 1995). There are many different techniques and ways of developing application and preparing the approach of a computer software development company and as pyschological data reports in many latest research projects. Many of these projects are often concerned with the way in which that application is developed and never the way that the strategy with the company overall is planned (Cusumano, MacCormack, Kemerer, & Crandall, 2003).

Another important aspect is which techniques and methods are accustomed to analyze business environment and exactly how the approach is created and executed.

In this newspaper we will attempt to analyze in more detail a very popular way of strategic preparing which has been mostly used for item portfolio preparing and/or tactical planning on a great abstract level (Houben, Lenie, & Vanhoof, 1999).

We is going to focus each of our interest in the software industry and base the research on the case study from the Austrian computer software industry since it is presented in(Bernroider, 2002).

In addition , we will endeavour to present certain guidelines, in order to carry out a prosperous SWOT Research for any computer software development company. This is the method of SWOT Examination, which was designed from Albert Humphrey during the 1960s, within a research job for Stanford University. In the following portions we will endeavour to elaborate about SWOT examination in Section II, demonstrate an example for the software expansion company in Section 3 and finally present the background from the method and related materials in Section

IV.

2. SWOT Evaluation: method description

The initials SWOT symbolize Strengths, Weaknesses, Opportunities and Threats. They are the basic components SWOT research which is generally presented as being a matrix with four key blocks; one for each component of the SWOT analysis.

Figure 1: A simple SWOT Research matrix

As it is quite visible in Number 1 we all also have another categorizations within matrix of SWOT Research; elements regarding the organization on its own which are named Internal (Strengths and Weak points ), components which are regarding the company as well as relationship having its environment, named External (Opportunities and Threats), elements which can be Helpful for the business (Strengths and Opportunities) and elements that are Harmful for the organization (Weaknesses and Threats).

First of all we need to define the four key building blocks of our diagram; Strengths: The talents of an organization are the core competencies from the company, the important thing factors which enables it to excel in most aspects and gain all types of profit, whether that is purely economical, company or various other. Weaknesses: Since weaknesses we all define the flaws that the organization has, something which implies that these disadvantages might lead to significant problems in the company’s proper planning and might even lead to worse scenarios, such as becoming a serious danger for the organization’s living. Opportunities: These are certain methods which will help a business to perform better, generate more profits etc . The opportunities can be of many different viewpoints, such as going into a new market, or in creating anew business unit and etc.

Hazards: As threats we term the potential reasons which might damage a company, like a new competitor in the main industry of procedure, a big cost effective recession and also other reasons which might threaten the current position of an organization. Having defined the primary blocks with the SWOT analysis matrix, we could continue trying to dig more deeply into these elements and try to hyperlink them with particular aspects of a business. The two key aspects of this kind of effort were already mentioned over and two most important types are the Inside and the External aspect of an organization. As it is mentioned in Part 2 of (Ward & Peppard, 2008), an important help formulating a small business strategy is the so called ‘Situation Analysis’, which in turn if put in words answers to the problem “Where happen to be we now? .

This is where the Internal and External analysis of your organization genuinely come into play and help managers realize the several dimensions with their business Interior analysis: The internal part of an organization can vary, depending on the size, nevertheless the main principles on which we all focus our interest stay the same and according to (Bernroider, 2002) these are the next; Resources, meaning the readily available resources that happen to be enabling the company to develop and deliver the software program which that sets out to provide to its customers. Capabilities, that is the critical success factors which the firm possesses which give it a competitive advantage. Quality, which is quite clear like a term, discussing the quality of the items / services provided by the business and to the standard of the internal organization of the organization, such as the quality of the organization processes.

Efficiency, meaning just how efficient the company is having a great structure in which all different departments, units and processes will be properly structured and communicate well, so as to have a smooth operation of the organization. Customer responsiveness, which is not simply referring to the most obvious, that is how many customers does a organization have, nevertheless also to how comprehensive is the diversification of a business products, what different price levels exist and just how satisfied happen to be those customers. Advancement, which is about the level of a company’s aspire to invest in new technologies, follow technological advancements, keep up with the emerging business trends and in which lengthen is part of the profits re-invest in research & development.

External research: The exterior analysis of an enterprise is a task the industry bit more difficult (see Background related literature), but it generally isan examination of the current competition along with the market in which the company functions. In order to give an example of exterior analysis elements we will certainly mention several external barriers and individuals as they are pointed out in (Bernroider, 2002): Promoting / division in foreign countries

Lifestyle, which identifies certain constraints or difficulties in connection that might happen due to diverse languages and also other cultural factors. Trade / commerce regulation issues, that are sometimes totally different from country to country and may cause problems once trying to enter into new markets. EU restrictions that might be somewhat complicated and restrictive in the standards of quality that needs to be followed to be able to market an application product in the EU Industry size

III. SWOT Research: example

Seeing that we have explained the SWOT analysis rules, how it must be carried out and exactly how it is from the environment of any company, it is time to actually describe an example for this method. Intended for our case in point we will endeavour to carry out a SWOT Examination of Microsoft, a popular and foreign company which usually creates software (such since the Microsoft company Windows Vista operating system and others) and also other kinds of technology equipment and gadgets. Step 1.

First of all we have to define the mission of Microsoft:

As it is described in Microsoft’s website the company’s mission is described as follows “At Microsoft, our mission and principles are to assist individuals and businesses through the globe realize all their full potential Source: http://www.microsoft.com/about/default.mspx#values

Step 2. and Step 3.

Determine 2: SWOT Analysis to get Microsoft (see Appendix to get larger version) In the next two steps (4&5) certain decisions have to be considered and integrated, about the strategy of Microsoft, one example is whether more cash will be used the ‘Online office’ growing market or will Microsoft company just try to fight Yahoo, since it seems that is the main rival.

IV. Background related materials

In order to gain some more insight inside the creation from the SWOT Analysis method, it might be useful to understand some more specifics about its source; this is where we come to a paradox, since very little is actually well-known on how the strategy was developed. There actually are not any papers that first present the method, because it was created throughout a research project financed by a large numbers of companies rendering it rather private. As it is mentioned in an actual www.businessball.com regarding SWOT Analysis and its beginning, “SWOTanalysis originated in the research done at Stanford Research Company from 1960-1970. The background to SWOT stemmed from the need to find out why corporate and business planning failed. The research was funded by the fortune 500 companies to discover what could be done about this inability.

The Research Crew were Marion Dosher, Doctor Otis Benepe, Albert Humphrey, Robert Stewart, Birger Lay.  As it is quite easy to understand, SWOT Analysis can be used in many place to place of management, since it is a method which gives managers the chance to analyze a specific problem make to daily news the pros and cons of the situation, a business etc . Hence it helps them to begin their research inside the certain trouble and provides the basic concepts to be able to decide what the next maneuver will be. For example it is also employed for Marketing management, in order to establish whether it is lucrative to enter new markets of create new products etc . (Wilson & Gilligan, 2005). An additional interesting quotation from this content would be the next; “A SWOT analysis steps a business unit, a proposition or idea; a PEST analysis measures a market. 

This kind of brings us back to the external aspect of the SWOT Evaluation method is the way in which that the Exterior environment is perceived by a company and exactly how it is assessed. Being further, software businesses have to pay seriously close focus on their external environment, seeing that competition and market status play a massive role in the success of any software organization. As mentioned in (Bernroider, 2002), many companies are likely to use an additional, complementary, technique in order to examine their exterior environment and in continuum to define particular ‘Opportunities’ and ‘Threats’. Both the most commonly used method are INFESTATION and the five Forces model by Avoir (Porter, 1998), (Grundy, 2006). PEST stands for Political, Inexpensive, Social and Technological and it involves these proportions of the exterior environment of an organization, in order to define potential threats and/or opportunities.

The 5 pushes model by simply Porter can be described as rather known model, which usually consists of the five primary elements of a company’s environment; (Existing) Competition, (Bargaining electricity of) Suppliers, (Bargaining electrical power of) Potential buyers, (Threat of possible) Alternatives and (Threat of possible) New Traders. To sum up, SWOT Analysis is definitely a useful tool intended for decision making and then for organizing ones thinking about a specific situation or perhaps idea, if that is a company’s current situation, a certain difficulty within a provider’s process and so forth It should be put together with other analyzingtechniques, in order to achieve a high level of research of a company, so as to be successful and maximize rewarding and efficient choices, since the final result of SWOT Analysis is always to formulate a general plan for a new strategy and ways to put into action it.

V. References

1 ) Bernroider, Electronic. (2002). Elements in SWOT Analysis Put on Micro, Small-to-Medium, and Large Computer software Enterprises: A great Austrian Research. European Management Journal, Quantity 20, No . 5, pp. 562-573. installment payments on your Cusumano, M., MacCormack, A., Kemerer, C. F., & Crandall, B. (2003). Software program Development Throughout the world: The State of the Practice. IEEE Software. a few. Grundy, Capital t. (2006). Rethinking and reform Michael Porter’s five makes model. Strategic Change, Amount 15, No 5, pp 213-229. 4. Houben, G., Lenie, T., & Vanhoof, K. (1999, August). A knowledge-based SWOT-analysis system as an instrument intended for strategic preparing in small and medium sized enterprises. Decision Support Systems, Volume 21, Pages 125-135. 5. Avoir, M. (1998). How competitive forces condition strategy. In M. Avoir, On Competition (pp. 21-38). Boston, MOTHER.: Harvard Organization School Press. 6. Steinmueller, E. (1995). The U. S. Software Industry: An Analysis and Interpretive History. In Deb. C. Mowery, The Intercontinental Computer Software Market. 1995: Oxford University Press. 7. Keep, J., & Peppard, M. (2008). Strategic Planning for Data Systems, third edition. John Wiley & Sons, LIMITED. 8. Wilson, R. Meters., & Gilligan, C. (2005). Strategic Advertising Management, Third Edition: organizing, implementation and control. Butterworth-Heinemann.

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