What Is Strategic Management In Organizations Commerce Essay

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As regards strategic management, writers such as Tang and Waters observe that it is concerned with managerial decisions and actions that determine the long term prosperity of an organization. Strategic management, as the process of business strategy formulation and implementation, is also concerned with establishing goals and directions, and developing and carrying out plans to achieve those objectives. As organizations evolve, so do their strategies and strategic management practices (Tang and Waters, 2006). Early research in strategic management started in the 1950s, with leading researchers such as Peter Drucker,Alfred Chandler and Philip Selzinck. Drucker (1954) cited in Tang and Waters initiated the theory of Management by Objectives and were one of the first scholars to acknowledge the dramatic impact of IT on management. He predicted in the 1960s the rise of knowledge workers in the information age. Chandler recognized the significance of a corporate level strategy that gives a business its structure and direction. Selzinck(1957)also cited in Tang and Waters (2006) established ground work of matching an organizational internal attributes with external factors. In the 1970s the theories of strategic management focused on growth, market share and portfolio analysis. The main assumption during this period was that a company's rate of profit was positively related with its market share. As organizations pursued larger market share, a number of growth theories were developed such as vertical integration, diversification, franchises, mergers and acquisitions et cetera. Some of these strategies are even more widely used today, with the facilitation of information technologies. Another milestone in strategic focus occurred in the 970s when there was a move from sales orientation towards customer focus. In the 1980s were preoccupied with gaining competitive advantages (see Michael Porter, 1980; 1987). Hamel and Prahalad popularized the concept of core competencies. They argued that companies should shift their resources to a few things that they can do better than the competition, and relegate non-core business operations to business partners. In the 1990s researchers in strategic management, increasingly recognized the importance of customer relationship

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In recent times, IT has become increasingly important in strategic management. IT driven systems are now indispensable in supporting business strategies. IT has become an impetus and enabler for reengineering projects. Reengineering also known as business process redesign, calls for fundamental changes in the way business is carried out. IT can be defined as technology applied to the creation, management and use of information (Tang and Waters, 2006). In this respect any technology that deals with information gathering, processing, storing and dissemination is considered IT, but today's IT is largely built on computer hardware and software applications. Like strategic management, IT has evolved over the last 50 years or so. The first electronic computer, electronic numerical integrator and calculator (ENIAC) was developed in 1946. Commercially available computers began in the early 1950s, with IBM as the leading vendor. The next major event was the birth of personal computers in the mid -1970s which became more widespread in the 80s. In the history of IT, the 1990s is generally known as the decade of internet booming. It should be noted that the two major factors that fuelled the growth of the internet were the development of the World Wide Web and the arrival of graphic web browsers. Although scientific management and IT developed in parallel over the last 50 years, the two disciplines have also had substantial impact on each other. According to Tang and Waters (2006), computer IT development can be divided into three periods, that is, the mainframe era from the 1950s to the 1970s, the microcomputer era from the 980s to the early 1990s, and the internet era from the 1990s to the present. The mainframe era is characterized by centralized computing, where all computing needs were serviced by powerful computers at the computer center. The proliferation of personal computers led to decentralized computing. In the internet era, decentralized computing mutated to distribute computing, where computing resources are located in multiple sites and are connected through networks.

Tang and Waters (2006) outline the interplay between the co-evolution of IT and strategic management approaches. Clearly, the roles of business and IT have co-evolved and expanded since the 950s. Early IT technologies in the 1950s and 1960s were used primarily for dealing with business transactions with associated data collection, processing and storage. Management Information Systems (MIS) were developed in the 1960s to provide information for managerial support but with little or no decision making input. Decision support systems (DSS0 were pioneered in the 1970s and offered various analytical tools, models and flexible user interface for decision support in problem solving (Tang and Waters 2006).The 1990s saw an increased emphasis on strategic information systems as a result of the changing competitive environment. Competitive advantage became a leading strategic management topic. Consequently IT was developed to support business strategic initiatives. The commercialization of the internet in the mid-990 spurred the growth of internet-based business applications. Although strategic support systems are almost entirely reserved for top executive functions dealing with strategic challenges, a strategic information system can be any type of IT that plays a key role in supporting business strategies. When IT has significant has significant impact on business core strategy, core operations or both, the corresponding IT systems are considered strategic information systems.

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Many scholars have written on the strategic importance of information and technology in the global economy. Nasbitt(982) observed that the world was transforming from an industrial to an information society, and IT would dominate the economic expansion and growth of nations. Similarly, Quinn (1992) argued how knowledge and service based systems are transforming and revolutionizing the economy. IT has made it possible for organizations to access vast amounts of information easily and quickly. Systems such as enterprise resource planning give executives the ability to monitor the operation of the entire organization in real time. Executive information portals have allowed top executives to take a much more comprehensive view of scientific management than ever before. Techniques such as the balanced scorecard (Kaplan and Norton, 1992) give a holistic view of the business performance by integrating factors in multiple business functions. In recent times, business process management (BPM) software has been designed with the intent of closing gaps in existing ERP systems. They have also been deployed to lower the cost and complexity of application and data integration. Another recent development is web services enabled by standards -based protocols such as XML, SOAP, WSDL and SOA. In the internet era the motivation of IT has from efficiency and effectiveness to value creation. On one hand, IT is playing a more active and significant role in strategic management and on the other, strategic management concerns have influenced the development of IT. In many cases, the theories and principles of strategic management led the way of IT development. IT in turn has made it more feasible for those strategic management theories and principles to be practiced in business (Tang and Waters, 2006).

The above observations by Tang and Waters (2006) indicate that IT in business has evolved and become increasingly integrated with organizational strategic management. To this extent, building a comprehensive strategic IT plan that aligns with the business strategy is essential to ensuring the success of the organization. Numerous studies have shown that IT alignment with business strategy is vital to achieve organizational goals and expected results. For example, Saharawi and Chan (2001) studied the benefit of alignment between business and IT strategies and concluded that the alignment can improve business performance. Symons (2005) cited by Tang and Waters (2006) claims that IT alignment has been one of the top three issues confronting IT and business executives for more than 20 years. According to Symons, a recent poll of CIOs and top business executives indicated that the alignment of IT and business goals is number one or two priority. There is no doubt that the application of IT and strategic information systems has aided businesses in gaining competitive advantages. However, the extent to which IT helps businesses to succeed varies as many other factors also contribute the long term superior performance.

Kettinger and others (1994) studied a large number of cases of strategic information systems and found that 40%of the companies had above-average performance in the short to intermediate term, while 20 5 of the companies sustained long-term (ten years or more) competitive advantage. Thus for many of these companies, their strategic investment in IT did not achieve their long-term objectives. In his controversial work, "IT doesn't matter", Nicholas Carr (2003) argues that since IT is now widely accessible due to lowering of cost, it no longer provides a competitive advantage to businesses. As such, he urges companies to disinvest heavily in IT products and services. Although some other researchers such as Warren McFarlan, Richard Nolan and John Hagel have debated Carr's view and have shown evidence of the strategic importance of IT, it is generally agreed that IT alone is not enough to sustain strategic advantages. Despite its key role in sustaining superior performance of organizations, it is only regarded as one facet of the comprehensive framework of strategic management. Its value is not so much its intrinsic properties, but in how it can be effectively deployed to support business strategies.

According to Perez and de Pablos (2003), in an entrepreneurial environment such as the present one, characterized by market globalization, the intensification of competition and the high rate of technological change, tangible assets no longer provide sustainable competitiveness. As firms are focusing on their intangible assets, intellectual capital cab be viewed as the future basis of sustained competitive advantage. This is particularly instructive in industries based on knowledge, such as information and software services. As correctly observed by Prahalad, (1983) quoted by Perez and de Pablos (2003), competitive advantage depends more and more on people embodied know-how. Accordingly, it is human capital, rather than physical or financial capital, that distinguishes the leaders in the market. Top management have traditionally based their competitive strategies on other factors, such as product and process technology, protected market niches, access to financial resources and economies of scale. Collis and Montgomery (995) state that the importance of human capital depends on the degree to which it contributes to the creation of a competitive differentiation. From an economic view, transaction costs theory indicates that firms gain a competitive advantage when they own firm specific resources that can not be copied by rivals. Thus, as the uniqueness nature of human capital increases, firms have incentives to invest resources into its management with the aim of reducing risks and capitalize on its productive potential (Perez and de Pablos, 2003). It should be noted that in the new global economy, organizations compete in complex and dynamic areas, so that the value and uniqueness of a firm's knowledge base is likely to shift as competitors create newer competitive strategies. As a result, the task of managing a firm's knowledge is further complicated.

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Over the last two decades, two main viewpoints have emerged to explain how sustainable competitive advantage can be created and maintained. One stresses market position and the other core competence. The positioning approach starts by considering what industry we want to be in and the position we want to take in it and follows up by asking how we can assemble the resources to compete. The competence approach on the other hand begins by assessing which distinctive competencies we want to build, and then considers the market opportunities that would exploit them best (Leavy, 2003). According to Tang and Walters (2006), Hamel and Prahalad (1990) popularized the idea of core competencies. They argued that firms should concentrate their resources to a few things that they can do better than the competition, and outsource non core business operations to business partners. The concept of core competence is positively related to competitiveness (Yang et al., 2oo6). The resource-based theory provides a more solid explanation on the linkage between core competency and competitiveness from individual as well as organizational level. The development of resource based theory diverts the attention of corporate strategy analysis from external context factors to internal resource factors. The internal-oriented perspective of core competency suggests that internal resources are more accordant with the ever changing situations. It is argued that the main source of a firm's profit should be guided by internal resources and competencies. It can be deduced that strategy can be formulated in two scenarios. One is formed by examining the external environment and the other by adjusting the internal value activities accordingly (Yang et al., 2006)

Leavy observes that over the last two decades, two main positions have emerged to explain how sustainable competitive advantage can be created and maintained. One stresses market position (industrial organizational theory) and the other core competence (resource-based view). It is therefore not surprising that a preoccupation of strategic management researchers is to understand superior performances of firms (McGrath, MacMillan and Venkataraman, 1995). The market positioning approach to strategy development is associated mainly with the work of Michael Porter. Within the positioning perspective as it is used today, strategic choice is focused primarily on the structure of the industry and how it might be shaped to advantage (Leavy, 2003). The objective is to establish a privileged hard-to-replicate position in an industry that is difficult to enter. In a departure from the positioning framework of Porter scholars have recently revived interest in the resource based view of the firm (see Wernerfelt. 1984 and Penrose,1959) , where a key tenet is that competitive advantages emerge through processes of resource accumulation, and deployment, leading to idiosyncratic endowment of proprietary assets. In this study, there is an attempt to extend this theme theoretically and empirically.

As mentioned earlier, in the strategy literature there two major paradigms for explaining sustained superior performance. The first one (market positioning) emphasizes barriers to competition and takes the position that industry effects will explain the greater part of persistent above normal returns. Numerous theoretical and empirical studies support this view. In this approach, competitive advantage is based a privileged market position and usually tends to reflect significant first-mover advantages in market investments, skills and infrastructure, which follower companies will find more expensive to replicate. According to Leavy (2003), a good corporate example of the advantages offered by this market positioning led approach is South West Airlines (SWA) and Porter has used it to demonstrate his six of market positioning namely i)right goals; ii)clear value proposition; iii) distinctive value chain; iv)trade-offs; v)activity chain alignment and vi) continuity of direction. SWA has a clear "no frills" value proposition, supported by a distinctively activity chain of highly aligned and reinforcing elements like secondary airports, point to point flight routes, standardized aircraft and so forth. The company is not focused on the most price sensitive end of the market and it is careful to forgo any temptations to compromise its positioning in search of short-term gain (Leavy 2003:30). Undoubtedly, SWA has developed special expertise in the implementation of this positioning strategy. However, its sustainable competitive advantage seems to be more in privileged market position than in proprietary core competence.

The second paradigm for explaining superior organizational performance has also antecedents. As noted by Williamsom (1999) observed, business strategy is a complex subject and is usually examined from several perspectives. This paradigm applies the lenses of core competence to the study of strategy. The concept first came to prominence in the early 1990s at a time when many companies were facing radically new and more competitive environments (Leavy 2003). However, Yang et al (2006) states that the concept of core competence was first brought by Selznick (1957) who used the distinctive competency to depict the corporate competitive advantage through value activities. Prahalad and Hamel (1990) indicated the linkage between core competence and corporate competitive advantage. The competence led perspective(resource based view) differs from the position approach by tending to work from a different starting point and laying its strategic bets in a different place. The positioning approach starts by considering what industry we want to be in and the position we want to take in it, and follow up by asking how we can assemble the resources to compete?(Leavy 2003). The competence approach, on the other hand, begins by assessing which distinctive competences we want to build, and then considers the market opportunities that would exploit them best. Two ideas are key to the concept of core competence. The first is the concept of core competence itself, which has been used in practice by many strategists as if it were synonymous with strength. In the Prahalad and Hamel sense, core competence must fulfill a number of key conditions. It must be rare, difficult to imitate, and valuable to customers across a range of product-market opportunities, present and future. As noted by Leavy (2003:31), a core competence "typically has a technological dimension, but it also has governance and collective learning dimensions that integrate it into the social fabric of the organization". As such, it is this multi-dimensional and organizational character that makes it difficult to replicate. The second idea central to the concept is the relationship between competence, core product and end product. In this regard, this extends the perspective on competitiveness to three levels. Similarly, Holmes and Hooper (2000:248) defines core competence as something that the organization does as at least as well as and preferably better than, any other company in the market.

According to Leavy (2003) Canon is an instructive example of a strategy based on core competency. Over the last 30 years, Canon has become a significant and highly profitable player in the camera, office-printer and desk-top-printer markets, yet its strategy has rarely been position-led or first-mover centered. In actual fact, it was a late entrant in all these cases. In direct contrast to SWA, Canon's strategy over most of its history has been largely competence-led. The company's strategy hinges on the development of deep expertise in fine optics, precision mechanics, fine chemicals and semi-conductors, with wide application, rather than resting itself too heavily in the dominance of specific markets. In line with its business philosophy, Canon has focused its branding strategy on the company itself, and its corporate identity, rather than on particular products or markets or markets. This approach has enabled Canon to move quiet flexibly within and across product-market demarcations in pursuit of corporate growth and renewal. This competence-driven strategy has allowed the firm to out-compete bigger competitors in market after market. For instance, in office printers, Canon's market share is small compared with those of competitors such as Hewlett-Packard and Olivetti. Yet, to fully appreciate its market influence, there is also need to look at relative share at the core product level. In the printer market, a core product is the laser engine that embodies most of a laser printer's key technologies. As Prahalad and others have indicated, most executives still tend to underestimate the power of core product dominance. Canon commands an 80 % plus manufacturing share of laser engines, much of which it supplies to the market leaders. By choosing to supply products to Olivetti and Hewlett-Packard, rather than using its proprietary technology to distinguish itself in terms of market position, Canon is in effect, borrowing the market shares of major rivals to help it accelerate investment in competence leadership and increase its control over the further evolution of the technologies critical to the industry's future (Leavy, 2003).

In view of the foregoing, the primary source of sustainable competitive advantage in each of the two paradigms (market positioning and core competence) is seen to be in a different place. In the first approach, it is rooted in industry structure and preemptive positioning and in the second, in organizational expertise and competence leadership. In some cases managers are tempted to ignore the distinctions between them because they tend to lead to broadly similar conclusions. However, while market position and core competence often are found conjoined in practice, there are areas where the two approaches see things differently, and their analytical methodologies offer different guidance. Instead of picking only one or the other, however, astute managers can offer test both approaches and generate wider range of options (Leavy, 2003).

Porter's model of Five Competitive Forces allows a structured and systematic analysis of market structure and competitive situation. The model can be applied to particular companies, market segments, industries or regions. Therefore, it is necessary to determine the scope of the market to be analyzed in a first step. Following, all relevant forces for this market are identified and analyzed Hence, it is not necessary to analyzer all elements of all competitive forces with the same depth. The Five Forces Model is based on microeconomics. It takes into account supply and demand, complementary products and substitutes, the relationship between volume of production and cost of production, and market structures like monopoly, oligopoly or perfect competition. The competitive forces model, as proposed by Porter, identified five forces which would impact on an organization's behaviour in a competitive market. These include the following: the rivalry between existing sellers in the market; the power exerted by the customers in the market; the impact of the suppliers on the sellers; the potential threat of new sellers entering the market; and the threat of substitute products becoming available in the market. In the following paragraphs the task environment faced by Gap is discussed by using Porter's Five Forces.

Competition:

The intensity of competition in an industry is affected by various factors, including the number of firms in the industry. The more firms the stronger the competition because there are more firms competing for the same customers. It appears that Gap Inc. is facing many competitors including emerging ones like H&H, some discounters such as Walt-Mart and Target, and department stores, such as Macy's and JCPenny. Slow market growth leads to increased competition because there is only a small number of new customers' entering the market each year and firms must compete to win existing customers. According to the US Department of Commerce sales at specialty stores rose only 0,7% in 2001.Family clothing stores had the best performance, with sales up 1,6%. Sales at women's apparel stores fell 2, 5%, and those at men's stores declined 1,8%. It is clear that Gap is facing stiff competition due to the dwindling sales at apparel specialty stores. Where firms have economies of scale, that is they have relatively high fixed costs and low variable costs, the more they produce the lower their per unit costs become. This results in more intense rivalry between firms as they compete to gain market share as is the case facing Gap. Besides being a leading player, Gap faces competition from large retailers like Wal-Mart and Target. Discounters such as Wal-Mart also offer a broader range of products than most competitors facing Gap. Where customers have low switching costs, this also intensifies competition as firms compete to retain their current customers and steal customers from other firms. One of the major challenges in the apparel industry is the changing customer tastes that constantly forced Gap to re-evaluate its strategies in to order to remain competitive. Low levels of product differentiation between firms leads to increased competition. The "absence of new merchandise offerings and new trends" have turned up the heat of competition for Gap Inc. Where a firm has a strong brand name or a highly differentiated product, this reduces the intensity of competition. Although Gap has strong brand recognition in the specialty apparel retailers' market, the mistakes that were made within the company and changing consumer groups and tastes have all increased competition in the sector. High exit barriers in the apparel industry increase competition because firms that might otherwise exit the industry are forced to stay and compete. A common exit barrier is where a firm has highly specialized equipment that it cannot sell or use for any other purpose. The costs involved in running a business entity in the apparel industry are huge. The costs cater for retail stores, marketing & advertising, designs, distribution centers and supplies.

As such the costs of leaving the industry are high and competitors tend to exhibit greater rivalry. The threat of competition faced by Gap Inc. is high.

 Potential Entrants:

In theory, any firm should be able to enter a market; however, in reality industries often possess characteristics that prevent new players from entering the market (barriers to entry).  Barriers to entry reduce the rate of entry of new firms, thus maintaining the level of profits for those firms already in the industry. Barriers to entry may exist for various reasons, including high capital costs of setting up a business in a particular industry; where an industry requires highly specialized equipment. Potential entrants may be reluctant to commit to acquiring specialized assets that cannot be sold or converted into other uses if the venture fails. The specialty apparel industry involves high capital costs of setting up the business portfolio. This include costs related to establishing stores, marketing & advertising, designs, distribution centers and purchasing garments. Lack of the proprietary technology or patents that are needed to become a player in the industry; extensive scale and branding of existing competitors may prevent potential entrants from gaining market share and hence deter entry into the market. Emerging players in the apparel sector such as H&H are encountering challenges because big players like Gap have strong brands, high-quality products and products under private labels. The existence of economies of scale also creates a barrier to entry because an existing firm like Gap can produce at a much lower cost per unit than a new firm. Gap can take advantage of its strategic and widely-based distribution centers to discourage new players from entering the market. The company's massive stores network of 2 979 stores can be utilized to bargain with suppliers to reduce prices. Currently, Gap's goods were being produced in approximately 3 600 factories in more than 50 countries. Such a portfolio will certainly scare potential entrants. As such the threat from potential entrants is low in the context of Gap Inc.

Buyers:

Customers are the purchasers of the goods or services produced by the company.  Factors that will affect the bargaining power of a customer include the volume of goods or services purchased. If the customer purchases a significant proportion of output, then they will have a significant amount of bargaining power. The fewer customers there are, the more bargaining power they will have to negotiate price. The numbers of customers in the apparel industry have been declining as indicated by the US Department of Commerce. According to the Department, sales at specialty stores rose only 0,7% in 2001. Only family clothing stores had the best performance, with sales up by a mere 1, 6%. Sales at women's apparel stores fell by 2, 5%, as well as those at men's stores which declined by 1, 8%. Such developments show that customers had more bargaining power, hence there the changing customer tastes. A product that has a stronger brand name will be able to be sold for a higher price in the market. Gap sold "high-quality products at competitive price levels". A firm that produces a product or service that is unique in some way will have more bargaining power and will be able to charge a higher price in the market. However in the apparel industry it seems that the "absence of new merchandise and new trends" has increased the bargaining power of customers. The bargaining power of customers has been strengthened by the availability of substitutes in the apparel industry. Gap's major competitors such as Target and Wal-Mart offer a substantially wider product range that rivals the one from Gap. When Gap made the "ill-fated foray into trendy clothes in early 2000" the alienated regular customers switched to other products offered by discounters and department stores. This triggered the current crisis facing Gap Inc. It is beyond doubt that the threat level coming from buyers or customers is high.

Threat of Substitutes:

Economics defines substitute goods as goods for which an increase in demand for one leads to a fall in demand for the other. In the Porter's Five Forces framework, a reference to a substitute good refers to a good in another industry. For example, natural gas is a substitute for petroleum. The existence of close substitutes constrains the ability of a firm to raise prices and, as the number of substitutes increase, the quantity demanded will become more and more sensitive to changes in the price level. The threat posed by substitute goods is affected by various factors, including the cost to customers of switching to a substitute product or service (switching costs). For example, the cost of switching between the Windows operating system and Apple operating system might be prohibitive because computer programs and accessories are built to work with one operating system or the other. The threat of substitute products also depends on buyer propensity to substitute; relative price-performance of substitutes; and perceived level of product differentiation. The threat level from substitute products of Gap's rivals is high because the switching costs are very low and the buyers' propensity to substitute is high. Despite the company's strong and well established brand in the specialty apparel retailers' market, the managerial mistakes, the increasing competition, and changing consumer groups and tastes have all shown the high threat posed by substitute products to Gap.

Suppliers and other stakeholders:

Suppliers are providers of the inputs to the industry, for example, labor and raw materials. Factors that will affect the bargaining power of a supplier include the number of possible suppliers and the strength of competition between suppliers and whether suppliers produce homogenous or differentiated products; the importance of sales volume to the supplier; and the cost to the firm of changing suppliers (switching cost). Gap faces a low threat level from suppliers because it uses many suppliers in more than 50 countries. Indeed, Gap's garments and merchandise are produced in approximately 3 600 factories, giving it advantages in economies of scale. To this extent, the company has a strong bargaining power in relation to its suppliers. The company's audacity to compel vendors to comply with its standards as stipulated by its Code of Vendor Conduct show Gap's influence over suppliers. However the company faces a threat fro other stakeholders particularly, Moody, and Standard & Poor. These two institutions have downgraded the credit ratings of Gap Inc. Although the firm was still able to raise capital, the downgrading has made doing so more expensive. The lowering of the credit ratings on the company would result in reduced access to the capital markets and higher interest costs on future financing. In a nutshell, the threat from suppliers and other stakeholders is mixed and can be classified as medium.

SWOT Analysis, is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a in a business venture. SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. Strengths and weaknesses are internal factors that create value or destroy value. They can include assets, skills, or resources that a company has at its disposal, compared to its competitors. They can be measured using internal assessments or external benchmarking. Opportunities and threats are external factors that create value or destroy value. A company cannot control them. But they emerge from either the competitive dynamics of the industry or from demographic, economic, political, technical, social, legal or cultural factors.

SWOT helps a company to se itself for better and for worse. Companies are inherently insular and inward looking SWOTs are a means by which a company can better understand what it does very well and where its shortcomings are. SWOTs will help the company size up the competitive landscape and get some insight into the vagaries of the marketplace. SWOT analysis has been a framework of choice among many managers for along time because of its simplicity and its portrayal of the essence of sound strategy formulation - matching a firm's opportunities and threats wit its strengths and weaknesses. Central to making SWOT analysis effective is accurate internal analysis, that is, the identification of specific strengths and weaknesses around which sound strategy can be built. SWOT Analysis is a simple but powerful framework for analyzing a company's strengths and weaknesses, and the opportunities and threats it faces. This helps the company to focus on its strengths, minimize threats, and take the greatest possible advantage of opportunities available to it. Below is a diagrammatic presentation of the SWOT analysis of Gap Inc: