SWOT in Practice

Now that we have learnt about what a SWOT analysis is, let us look at a real example of a typical SWOT analysis. The example below shows how the SWOT tool could be applied to the clothing company, Levi’s.

Example of SWOT analysis in action:

Company profile: Levi’s

Strengths

• The company has been around a long time (since 1873). This gives them a strong heritage and a unique understanding of the market.
• They are market leaders – despite intense pressure from rivals and new entrants.
• They have a reputation for ’capturing the imagination’ of the young target audience through world class advertising.
• Creating cultural phenomena, not just a brand. They should be able to leverage this expertise.

Weaknesses

• Sales are shrinking as a growing number of competitors enter the market.
• They are popular with the over 30s, but find it difficult to connect with the younger market.
• Though they invest in innovation, they have not evolved as fast as the market or as fast as their customers.
• Innovations have sometimes appeared attention-seeking rather than progressive.

Opportunities

• The market is growing steadily at about 5% per annum. Market researchers Mintel do not believe that jeans’ risk falling from favour.
• New market segments are being created (i.e. the plus-size group and for the environmentally conscious) whilst the traditional segments are also increasing in size.
• The growth of the digital media is giving Levi’s a new channel to market that will help them reach the key ’youth’ segment.

Threats

• Low cost, new entrants are changing the shape of the market and challenging Levi’s position within it.
• Original market segment has aged and evolved into a demographic segment not associated with jeans.
• It’s association with the ‘older’ demographic means that it risks losing its ‘cool’ appeal.