1. MODULE 3:
MICROENVIRONMENT:
SWOT ANALYSIS
STRATEGIC
MANAGEMENT
DR. EMMANUEL DOTONG
Associate Professor of Business
ejdotong@alum.up.edu.ph
STRATEGIC TOOLS AND MODELS

2. Module
Coverage
01
02
Business Macroenvironment
SWOT ANALYSIS
MODULE 3:
SWOT ANALYSIS
03 SWOT ANALYSIS APPLICATION

3. 01
BUSINESS MICROENVIRONMENT
Definition and Relevance

4. BUSINESS MICROENVIRONMENT
The Business Microenvironment encompasses the factors that are closely related
to a company and have a direct impact on its operational effectiveness and
decision-making.
In a SWOT Analysis, it is essential to consider these internal and proximate
external factors to understand an organization's Strengths, Weaknesses,
Opportunities, and Threats.
DEFINITION

5. 02
SWOT ANALYSIS
Definition, Purpose, and Procedures

6. SWOT analysis is a strategic framework used
to evaluate the internal strengths (S) and
weaknesses (W) of an organization or project, as
well as the external opportunities (O) and threats
(T) it faces in its operating environment. By
systematically assessing these factors, a SWOT
analysis provides valuable insights to guide
decision-making, formulate strategies, and enhance
overall performance.
It helps organizations capitalize on strengths,
address weaknesses, seize opportunities, and
mitigate threats to achieve their objectives more
effectively.
SWOT ANALYSIS
DEFINITION

7. SWOT ANALYSIS
STRATEGIC PLANNING RESOURCE ALLOCATION RISK MANAGEMENT INFORMED
DECISION-MAKING
Provides a structured
approach to identify how
your organization aligns with
its external environment.
Aids in prioritizing initiatives
and allocating resources
effectively.
Helps identify vulnerabilities
and prepare strategies for
mitigating risks.
Acts as a framework for
managers to make data-
driven decisions.
PURPOSE

8. IDENTIFYING CORE
COMPETENCIES
UNDERSTANDING
AREAS OF
IMPROVEMENT
RECOGNIZING
MARKET
OPPORTUNITIES
MITIGATING
POTENTIAL THREATS

9. SWOT ANALYSIS
EXTERNAL FACTORS
Internal factors refer to the various elements,
attributes, and characteristics that are inherent to an
organization or entity and directly influence its
operations, decisions, and overall performance.
These factors are typically within the organization's
control and can have a significant impact on its
success, growth, and sustainability.
External factors, in a business context, refer to
the elements and influences that exist outside of an
organization and have an impact on its operations,
performance, and decision-making processes. These
factors are often beyond the organization's direct control,
yet they play a crucial role in shaping its business
environment and determining its opportunities and
challenges.
INTERNAL FACTORS
COMPONENTS

10. 10
SWOT ANALYSIS
S
W
O
T
Opportunities are external factors that
an organization could capitalize on to
gain a competitive edge.
Strengths refer to the internal
attributes of an organization that give
it a competitive advantage.
Threats are external factors that could
potentially harm an organization.
Weaknesses are internal limitations or
shortcomings that hinder an
organization's ability to achieve its
objectives.
Strengths Weaknesses
Opportunities Threats
COMPONENTS DEFINITION

11. CONDUCTING A SWOT ANALYSIS
STEP 1: PRELIMINARY RESEARCH
Conduct internal and external reviews to gather data on
organizational performance, market trends, and competitors.
STEP 2: ASSEMBLE A SWOT TEAM
Form a multidisciplinary team and facilitate a brainstorming
session to identify Strengths, Weaknesses, Opportunities, and
Threats.
STEP 3: ANALYZE AND PRIORITIZE
Evaluate and rank the identified SWOT components based on
their relevance and potential impact on the organization.
STEP 4: DEVELOP ACTION PLANS AND
STRATEGIES
Create a SWOT matrix and actionable strategies that leverage
Strengths and Opportunities while mitigating Weaknesses and
Threats, and translate these into executable action plans.
STEP-BY-STEP PROCESS

12. SWOT ANALYSIS
ANALYSIS
INTERNAL EXTERNAL
THREATS
OPPORTUNITIES
WEAKNESSES
STRENGTHS
• Perform an internal review
and pinpoint Key
Performance Indicators
that offer benefits across
various business sectors
including operations,
marketing, finance, human
resources, among others.
• Carry out an internal
evaluation to identify Key
Performance Indicators
that reveal shortcomings
in essential business
areas such as operations,
marketing, finance, and
human resources.
• Conduct an external
evaluation through PEST
analysis to underscore
potential benefits that the
business is well-
positioned to leverage
within this external
environment.
• Perform an external
review utilizing PEST
analysis to identify
potential risks or
challenges that could
adversely impact the
business within its
external environment.
PROCEDURES

13. 1
3
STRENGTHS
S1
S2
S3
OPPORTUNITIES
O1
O2
O3
WEAKNESSES
W1
W2
W3
THREATS
T1
T2
T3
SWOT
ANALISYS

14. § Total Revenue
§ Sales Growth Rate
§ Customer Acquisition Cost (CAC)
§ Customer Lifetime Value (CLTV)
§ Conversion Rate
§ Average Deal Size
§ Sales Pipeline Value
§ Win Rate
§ Sales Cycle Length
§ Gross Margin
§ Churn Rate
§ Repeat Purchase Rate
§ Upsell/Cross-sell Ratio
§ Sales by Product/Service
§ Sales by Region/Market
§ Sales by Customer Segment
§ Sales by Salesperson/Team
§ Customer Retention Rate
§ Ratio of New vs. Existing Customers
§ Sales Performance Index
§ Total Marketing Qualified Leads (MQLs)
§ Conversion Rate from MQL to Sales Opportunity
§ Marketing to Sales Qualified Leads (SQL) Ratio
§ Website Traffic
§ Conversion Rate on Website
§ Click-Through Rate (CTR)
§ Cost per Lead (CPL)
§ Return on Advertising Spend (ROAS)
§ Customer Engagement Score
§ Social Media Reach/Engagement
§ Email Open Rate
§ Email Click-through Rate
§ Content Engagement Metrics
§ Net Promoter Score (NPS)
§ Marketing Cost as a Percentage of Revenue
§ Marketing Campaign ROI
§ Brand Awareness Metrics
§ Search Engine Rankings
§ Marketing Channel Performance
§ Customer Feedback and Surveys
SALES AND MARKETING
SWOT

15. § Capacity Utilization
§ Cycle Time
§ Lead Time
§ Inventory Turnover
§ Production Efficiency
§ Quality Defect Rate
§ Work-in-Progress (WIP)
§ On-Time Delivery Rate
§ Production Cost per Unit
§ Equipment Downtime
§ Employee Productivity
§ Resource Allocation
§ Supplier Performance
§ Production Scheduling Adherence
§ Yield Rate
§ Process Efficiency
§ Waste and Scrap Rate
§ First Pass Yield
§ Bottleneck Identification
§ Supplier Lead Time
§ Raw Material Inventory
§ Finished Goods Inventory
§ Maintenance Costs
§ Energy Consumption
§ Six Sigma Levels
§ Product Variation
§ Demand Forecast Accuracy
§ Setup Time
§ Process Lead Time
§ Overall Equipment Effectiveness (OEE)
§ Supply Chain Lead Time
§ Cost of Goods Sold (COGS)
§ Just-in-Time (JIT) Inventory Levels
§ Return on Assets (ROA)
§ Production Flexibility
§ Production Line Balancing
§ Product Development Lead Time
§ Total Productive Maintenance (TPM)
§ Customer Order Cycle Time
§ Production Process Automation
OPERATIONS AND PRODUCTIONS
SWOT

16. § Revenue Growth Rate
§ Profit Margin
§ Return on Investment (ROI)
§ Debt-to-Equity Ratio
§ Current Ratio
§ Quick Ratio (Acid-Test Ratio)
§ Accounts Receivable Turnover
§ Accounts Payable Turnover
§ Working Capital
§ Cash Conversion Cycle
§ Earnings Before Interest and Taxes (EBIT)
§ Earnings Per Share (EPS)
§ Price-to-Earnings (P/E) Ratio
§ Dividend Yield
§ Cash Flow from Operations
§ Capital Expenditure (CapEx)
§ Return on Assets (ROA)
§ Financial Leverage
§ Net Working Capital
§ Interest Coverage Ratio
§ Debt Service Coverage Ratio
§ Return on Equity (ROE)
§ Gross Margin
§ Net Profit Margin
§ Operating Cash Flow Ratio
§ Operating Expense Ratio
§ Inventory Turnover
§ Fixed Asset Turnover
§ Cost of Goods Sold (COGS)
§ Net Present Value (NPV)
§ Internal Rate of Return (IRR)
§ Payback Period
§ Average Collection Period
§ Free Cash Flow
§ Return on Capital Employed (ROCE)
§ Discounted Cash Flow (DCF)
§ Days Sales Outstanding (DSO)
§ EBITDA (Earnings Before Interest, Taxes,
Depreciation, and Amortization)
§ Market Capitalization
§ Price-to-Book (P/B) Ratio
ACCOUNTING AND FINANCE
SWOT

17. • Employee Turnover Rate
• Employee Engagement Score
• Absenteeism Rate
• Time-to-Fill
• Cost per Hire
• Training Investment per Employee
• Retention Rate
• Performance Appraisal Scores
• Employee Satisfaction Survey Results
• Diversity and Inclusion Metrics
• Promotion Rate
• Leadership Pipeline Strength
• Average Tenure
• Training Effectiveness
• Succession Planning Progress
• Employee Benefits Utilization
• Job Satisfaction Index
• Workforce Productivity
• Labor Cost Percentage
• Safety Incidents
§ Ratio of HR Staff to Employees
§ Skill Gap Analysis
§ Employee Wellness Participation
§ Employee Referral Rate
§ Learning and Development ROI
§ Grievance Resolution Time
§ Employee Benefits Cost
§ Internal Mobility Rate
§ Job Offer Acceptance Rate
§ Employee Performance Improvement Rate
§ Workplace Diversity Index
§ Voluntary vs. Involuntary Separation Rate
§ Work-Life Balance Score
§ Leadership Development Program Effectiveness
§ HR Compliance Score
§ Employee Feedback Participation
§ Average Training Hours per Employee
§ Benefit Satisfaction
§ Employee Skill Matrix
§ Remote Work Productivity
HUMAN RESOURCE
SWOT

18. • Uptime Percentage
• Response Time
• Network Latency
• System Downtime
• Bandwidth Utilization
• IT Security Incident Count
• IT Budget Utilization
• IT Project Completion Rate
• Help Desk Response Time
• Software Bug Count
• Software Release Frequency
• Data Backup Success Rate
• Server Virtualization Ratio
• IT Staff Training Hours
• Application Uptime
• IT Incident Response Time
• IT Asset Utilization
• IT Governance Compliance Score
• Software License Compliance
• Cybersecurity Training Completion Rate
§ IT Infrastructure Upgrade Frequency
§ User Authentication Failures
§ Data Security Breach Costs
§ IT Change Management Success Rate
§ Backup and Recovery Time
§ Network Downtime
§ IT Service Availability
§ IT Vendor Performance
§ System Scalability
§ Average Resolution Time for IT Tickets
§ IT Compliance Audit Results
§ Cloud Service Uptime
§ Mobile App Performance
§ Data Encryption Implementation Rate
§ IT Disaster Recovery Plan Testing Frequency
§ Employee IT Skills Assessment
§ IT Infrastructure Health Monitoring
§ IT Help Desk Satisfaction Score
§ Software Vulnerability Patching Rate
§ Business Continuity Plan Testing
INFORMATION AND COMMUNICATION TECHNOLOGY
SWOT

19. • Employee Turnover Rate
• Employee Engagement Score
• Absenteeism Rate
• Time-to-Fill
• Cost per Hire
• Training Investment per Employee
• Retention Rate
• Performance Appraisal Scores
• Employee Satisfaction Survey Results
• Diversity and Inclusion Metrics
• Promotion Rate
• Leadership Pipeline Strength
• Average Tenure
• Training Effectiveness
• Succession Planning Progress
• Employee Benefits Utilization
• Job Satisfaction Index
• Workforce Productivity
• Labor Cost Percentage
• Safety Incidents
§ Ratio of HR Staff to Employees
§ Skill Gap Analysis
§ Employee Wellness Participation
§ Employee Referral Rate
§ Learning and Development ROI
§ Grievance Resolution Time
§ Employee Benefits Cost
§ Internal Mobility Rate
§ Job Offer Acceptance Rate
§ Employee Performance Improvement Rate
§ Workplace Diversity Index
§ Voluntary vs. Involuntary Separation Rate
§ Work-Life Balance Score
§ Leadership Development Program Effectiveness
§ HR Compliance Score
§ Employee Feedback Participation
§ Average Training Hours per Employee
§ Benefit Satisfaction
§ Employee Skill Matrix
§ Remote Work Productivity
HUMAN RESOURCE
SWOT

20. • Compliance Audit Results
• Number of Legal Cases
• Regulatory Fines or Penalties
• Regulatory Compliance Score
• Data Privacy Compliance
• Employee Training on Compliance
• Whistleblower Reports
• Conflict of Interest Disclosures
• Third-Party Due Diligence
• Legal and Compliance Budget
• Anti-Corruption Initiatives
• Ethics Hotline Usage
• Legal Document Management Efficiency
• Contract Compliance
• Anti-Money Laundering (AML) Compliance
• Consumer Protection Compliance
• Intellectual Property Protection
• Environmental Compliance
• Labor Law Compliance
• Product Safety Compliance
§ Health and Safety Compliance
§ Corporate Governance Compliance
§ Regulatory Reporting Accuracy
§ Policy Adherence
§ Cybersecurity Compliance
§ Export Control Compliance
§ Records Retention Compliance
§ Code of Conduct Violations
§ Licensing and Permit Compliance
§ Healthcare Compliance (if applicable)
§ Financial Reporting Compliance
§ Social Responsibility Reporting
§ Compliance Training Completion Rate
§ Internal Controls Effectiveness
§ Governmental Relations Compliance
§ Product Labeling Compliance
§ Data Breach Response Time
§ Anti-Fraud Measures
§ Compliance Communication Channels
§ Ethics and Compliance Committee Effectiveness
LEGAL AND COMPLIANCE
SWOT

21. • Defect Rate
• Customer Complaint Rate
• First Pass Yield
• Rejected Products Rate
• Quality Inspection Cycle Time
• Root Cause Analysis Effectiveness
• Quality Audit Findings
• Supplier Quality Score
• Process Capability Index (Cpk)
• Quality Improvement Project Completion
Rate
• Non-Conformance Rate
• Quality Cost
• Product Recalls
• Quality Training Hours
• Quality Control Documentation Accuracy
• Quality Inspection Sampling Plan Adherence
• Quality Standard Adherence Rate
• Customer Satisfaction with Quality
• Quality Management System Compliance
• Defect Tracking and Resolution Time
§ Supplier Corrective Action Requests (SCAR)
Response Time
§ Quality Control Team Effectiveness
§ Quality Control Process Automation
§ Continuous Improvement Initiatives
§ Quality Control Training Investment
§ Quality Audit Frequency
§ Quality Metrics Dashboard Accuracy
§ Process Documentation Clarity
§ Calibration and Maintenance Frequency
§ Quality Control Inspection Tools Utilization
§ Quality Control Process Standardization
§ Quality Improvement Idea Implementation Rate
§ Quality Control Employee Engagement
§ Quality Control Data Analysis Frequency
§ Supplier Quality Improvement Collaboration
§ Quality Control Training Effectiveness
§ Quality Control Inspection Procedure Adherence
§ Quality Control Audit Follow-Up Effectiveness
§ Quality Control Incident Response Time
§ Quality Control Culture
QUALITY CONTROL AND ASSURANCE
SWOT

22. 02
SWOT ANALYSIS APPLICATION
SWOT Analysis in-action

23. PEST ANALYSIS
E1 Minimum Wage Increase
E2 High Inflation Rate
E3 Increase in Supply Chain Cost
ECONOMIC FACTORS
T1 Social Media Trends
T2 Online Reservation and Delivery Systems
T3 New Smart Kitchen Technologies
TECHNOLOGICAL FACTORS
P1 Revised Public Establishments Smoking Policy
P2 Revised Tax Policies for Alcoholic Beverages
P3 Active Public Health Campaigns
POLITICAL FACTORS
S1 Health and Wellness Trends
S2 Consumer’s Digital Dependence
S3 Active Cultural Events and Holidays
SOCIAL FACTORS
MACROENVIRONMENT FACTORS

24. A
NA
L
Y
S
I
S
P
E
S
T
P1 Revised Public Establishments Smoking Policy
All indoor public establishments, including restaurants, bars, and entertainment venues, are now
required to be smoke-free environments. This change aligns with growing health awareness trends and
aims to provide clean and safe spaces for patrons and employees (De la Cruz, 2023)
E1 Minimum Wage Increase
The Philippines has announced a 20-peso increase in the minimum wage in Metro Manila to address rising
living costs and enhance worker compensation, aiming to improve their quality of life. While this move
positively impacts workers, businesses may need to navigate higher labor costs and potential shifts in
consumer spending (Dotong, 2023).
S1 Health and Wellness Trends
The landscape of health and wellness is in constant flux, influenced by shifting consumer choices,
technological progress, and a heightened focus on overall well-being. This is evident in trends like the rise
of plant-centric diets, tailored nutrition plans, the surge in non-alcoholic consumption, and the demand
for clear nutritional information (Clara, 2023).
T1 New Smart Kitchen Technologies
Smart kitchen technologies are transforming the operations of restaurants and bars, improving efficiency,
customer experiences, and safety. These include Kitchen Management Systems, Smart Kitchen
Appliances, Temperature and Monitoring Sensors, Kitchen Display Systems (KDS), Digital Recipe
Management, Voice-Activated Assistants, Smart Dishwashers, Allergen and Dietary Preference
Management, and Waste Management Solutions, and others (Ocampo, 2023)

25. INTERNAL FACTORS
System uptime, response time, network bandwidth
utilization, and cybersecurity incidents, gauging the
effectiveness of technology infrastructure and data security.
Information and Communication Technology
New product development success rate, research project
completion time, and patents filed, assessing the efficiency
and innovation of research and development efforts.
Research and Development
Regulatory violation incidents, contract compliance rate,
and legal dispute resolution time, evaluating adherence to
laws and ethical standards.
Legal and Compliance
Defect rate, customer complaints, and product return rate,
measuring the effectiveness of maintaining product and
service quality.
Quality Control and Assurance
Include revenue volume, market demand, conversion rates,
customer acquisition cost, and brand awareness,
advertising and impact on business goals.
Sales and Marketing
Cycle time, efficiency, quality, and inventory turnover,
evaluating the effectiveness of manufacturing and
delivery processes.
Operations and Production
Profitability ratios, liquidity measures, return on
investment, and debt-to-equity ratio, assessing the
financial health and performance of the organization.
Accounting and Finance
Employee turnover rate, training hours per employee,
time-to-fill vacancies, and employee satisfaction score,
measuring aspects of workforce management.
Human Resource
Identify the
Strengths and
Weaknesses
BUSINESS FUNCTIONAL AREAS

26. SWOT ANALYSIS
INTERNAL FACTORS EXTERNAL FACTORS
POSITIVE
NEGATIVE
S1 High Customer Traffic (SM)
S2 Hybrid Service Offerings (OP)
S3 High Revenue Growth Rate (AF)
STRENGTHS
W1 Low Turnover Rate (OP)
W2 Limited Sitting Capacity (OP)
W3 Poor Social Media Presence (SM)
WEAKNESSES
O1 Partnership with Online Delivery Services (S2,T2)
O2 Potential Increase in Productivity (T2, T3, S2)
O3 Develop Local Events Sales Promotion (S3, T1)
OPPORTUNITIES
T1 Potential Increase in Production Cost (E1, E2, E3)
T2 Potential Decrease in Demand (P1, P2, P3, E2)
T3 Potential Increase in Product Price (E1, E2, E3)
THREATS
MATRIX

27. S1 High Customer Traffic
The restobar has high customer traffic with an average of 200 customers visiting the
establishment daily during weekdays and 400 customers during weekends (Restobar Corporate
Name, 2023)
O1 Partnership with Online Delivery Services
The restobar may establish a partnership with online delivery services that can result in a
forecast average of 150 additional meal orders per day during weekdays and 250 additional
meal orders during weekends. (S2, T2)
W1 Low Table Turnover Rate
The restobar faces challenges with low table turnover rate, evidenced by an average service time
of 40 minutes per table during weekdays and 50 minutes per table during weekends. (Restobar
Corporate Name, 2023)
T1 Potential Increase in Production Cost
The restobar may face the potential risk of an increase in production costs, with projections
indicating a possible 15% rise in ingredient costs and a 10% increase in labor costs in the
upcoming quarter. (E1, E2, E3)
S
W
O
T

28. END Thank you for Listening!
ASSOC. PROF. EMMANUEL DOTONG
Management Consultant
ejdotong@alum.up.edu.ph