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PROJECT REPORT
In the partial fulfillment for the award of Bachelor of Technology
Degree In
MECHANICAL ENGINEERING
From
Kurukshetra University, Kurukshetra
SUBMITTED TO:- SUBMITTED BY-
Er. Gaurav Mehta ABCDZ (2708200)
AP-ME Deptt. Mech. 8Th
Sem.
June-2012
DEPARTMENT OF MECHANICAL ENGINEERING
JAN NAYAK CHAUDHARY DEVI LAL COLLEGE OF ENGINEERING
SIRSA
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ACKNOWLEDGEMENT
It gives us a great pleasure to present this SSI project report on
XYZ Pvt. Ltd. I would like to express our sincere thanks, with a
deep sense of gratitude to our Guide Er. Gaurav Mehta, AP-ME
Department for his keen interest, valuable guidance and constant
motivation which is primarily responsible for completion of this
Project report.
I am thankful to all the Mechanical Engineering Department
for their valuable guidance, suggestions and timely help. The well
experienced and skilled staff of Mechanical Department imparted
us technical knowledge to a great extent by preparing this Project
Report under the guidance of our guide and Mechanical
department.
ABCZ (2708200)
B. Tech. (Mechanical Engg.)
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CERTIFICATE
This is to certify that me the students of B.Tech. VIIIth
Semester
(Mechanical Engineering) have successfully completed the SSI
project report entitled Concrete pipe in the partial fulfillment
for the award of Bachelor of Technology Degree in Mechanical
Engineering from Kurukshetra University, Kurukshetra during the
academic year 2011.
I wish him a prosperous & bright future with all the great
silvery success in their career.
ABCZ (2708200)
Er. Gaurav Mehta Er. Rajdeep Singh
AP-ME Deptt. HOD -ME Deptt.
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PROJECT REPORT
Under Small Scale Industries Schemes
1. Firm Name:-XYZ Pvt. Ltd.
.2. Address:- Plot no 41, Phase-II, Industrial Area, Sirsa
(Haryana)-125055
3. Nature of Business: -Manufacturing of XYZ Products.
4. Target: - 500 Units per month.
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CONTENTS
Description Page No.
Introduction to Small Scale Industry 7 MSME 8 How to Start a Small Scale Industry 9 Financial Requirements 31 Small Industrial Development Organization 32 Important schemes of Financial SFC 34 Concept of Marketing 36 Steps In Marketing Management 40 Product Classification 41 Organization Structure of SSI 47 Organization Under SSI 48 SWOT analysis 50 Market Potential 73 Basis and Presumption 74 Raw Material 87 Conclusion 89
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INTRODUCTION TO SMALL SCALE INDUSTRY
The SSI (SMALL SCALE INDUSTRY) today is immense for the
growth of the country. Small scale industries are the industries
which are run with the help of hired labors and which also use
some simple machine and power.
The investment scale in this industry from 5 lakh to 1crore for
fixed assets. Irrespective number of worker engaged is small scale
industry unit.
In India these type of industries are permuted to meet with the
problem of excess population & unemployment so the government
of India praise entrepreneur to step up small scale industries by
aiding him by giving loans, land, guidance etc. The strategy
adopted by the government is:-
1. Public entrepreneurship should remain confined only to those
industries & sector where private enterprise, individual or
corporate, is generally not attracted. Existing public
entrepreneurship be improved through better management & by
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putting relative greatly emphasis on research &development. There
is need to streamline the R&D wing of public sector enterprise.
2. All possible efforts are made very seriously (not casually) for
the development of an industrial culture. It should be realize that
the central core of entrepreneurship is the motive force since by its
nature; entrepreneurship implies positive action and individual
with the right kind of combination of ability can pursue their goal
with unremitted courage and enthusiasms.
3. There is need to development management education and
industrial training.
4. The development of backward region / area constitutes a new
challenge. Program for their development be drawn up and should
be effective implemented.
5. Adequate measure is a must for mobilizing & casting the
entrepreneurs talent in the country. In this context, it should be
realized that entrepreneurs are not the grief of a particular classes.
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6. Economic administration by the state should be improved and
made more effective so that economic policy may be fully
achieving their objective in the overall interest of economy.
7. Financial institute should provide adequate and timely credit and
timely create and technical assistance, especially to the small and
medium sized enterprise. They may also impart knowledge about
the need of economy and they should file their massive data in
term of growth of new entrants or entrepreneurs in the field of
industry.
Definitions of Micro, Small & Medium Enterprises
In accordance with the provision of Micro, Small & Medium
Enterprises Development (MSMED) Act, 2006 the Micro, Small
and Medium Enterprises (MSME) are classified in two Classes:
(a) Manufacturing Enterprises- The enterprises engaged in the
manufacture or production of goods pertaining to any industry
specified in the first schedule to the industries (Development and
regulation Act,1951). The Manufacturing Enterprise are defined in
terms of investment in Plant & Machinery.
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(b) Service Enterprises: The enterprises engaged in providing or
rendering of services and are defined in terms of investment in
equipment. In India, the Micro and Small Enterprises (MSEs)
sector plays a pivotal role in the overall industrial economy of the
country. It is estimated that in terms of value, the sector accounts
for about 39% of the manufacturing output and around 33% of the
total export of the country. Further, in recent years the MSE sector
has consistently registered higher growth rate compared to the
overall industrial sector. The major advantage of the sector is its
employment potential at low capital cost. As per available
statistics, this sector employs an estimated 31 million persons
spread over 12.8 million enterprises and the labour intensity in the
MSE sector is estimated to be almost 4 times higher than the large
enterprises.
http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/India -
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Enterprises Investment in plant & machinery
Micro
Enterprises Does not exceed twenty five lakh rupees
Small
EnterprisesMore than twenty five lakh rupees but
does not exceed five crore rupees
Medium
Enterprises
More than five crore rupees but does not
exceed ten crore rupees
Service Sector
Enterprises Investment in equipments
MicroEnterprises Does not exceed ten lakh rupees:
Small
Enterprises
More than ten lakh rupees but does not
exceed two crore rupees
Medium
Enterprises
More than two crore rupees but does not
exceed five core rupees
MINISTRY OF MICRO, SMALL AND MEDIUMENTERPRISES
The President under Notification dated 9th
May 2007 has amended
the Government of India (Allocation of Business) Rules, 1961.
Pursuant to this amendment, Ministry of Agro and Rural
Industries (Krishi Evam Gramin Udyog Mantralaya) and Ministry
of Small Scale Industries (Laghu Udyog Mantralaya) have been
merged into a single Ministry, namely, MINISTRY OF MICRO,
SMALL AND MEDIUM ENTERPRISES ( SUKSHMA LAGHU
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AUR MADHYAM UDYAM MANTRALAYA) Worldwide, the
micro small and medium enterprises (MSME) have been accepted
as the engine of economic growth and for promoting equitable
development. The major advantage of the sector is its employment
potential at low capital cost. The labour Intensity of the MSME
sector is much higher than that of the large enterprises. The
MSME constitute over 90% of total enterprises in most of the
economies and are credited with generating the highest rates of
employment growth and account for a major share of industrial
production and exports. In India too, the MSME play a pivotal
role in the overall industrial economy of the country. In recent
years the MSME sector has consistently registered higher growth
rate compared to the overall industrial sector. With its agility and
dynamism, the sector has shown admirable innovativeness and
adaptability to survive the recent economic downturn and
recession.
As per available statistics (4th
Census of MSME Sector), this sector
employs an estimated 59.7 million persons spread over 26.1
million enterprises. It is estimated that in terms of value, MSME
sector accounts for about 45% of the manufacturing output and
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around 40% of the total export of the country.
TRAINING INSTITUTES
National Entrepreneurship Development Institutes
National Institute for Entrepreneurship and Small BusinessDevelopment (NIESBUD), NOIDA
National Institute of Micro, Small and Medium Enterprises(NIMSME)
(Formerly National Institute of Small Industry Extension
Training (NISIET))
Indian Institute of Entrepreneurship (IIE), GuwahatiOthers
MSME Development Institutes
Tool Rooms
Central Footwear Training Centres, Agra & Chennai Fragrance and Flavour Development Centre, Kannauj
Process-cum-Product Development Centre, Agra
Electronics Service & Training Centre, Ram Nagar
Institute for Design of Electrical Measuring Instruments,Mumbai
http://niesbud.nic.in/http://niesbud.nic.in/http://niesbud.nic.in/http://niesbud.nic.in/http://www.nimsme.org/http://www.nimsme.org/http://www.nimsme.org/http://www.nimsme.org/http://iie.nic.in/http://www.laghu-udyog.com/sido/sisi.htmhttp://www.laghu-udyog.com/sido/sisi.htmhttp://www.laghu-udyog.com/sido/sisi.htmhttp://www.laghu-udyog.com/NASApp/senetwar/ctrlDRSearch.jsp?MethodType=getOffTypeListinghttp://www.laghu-udyog.com/NASApp/senetwar/ctrlDRSearch.jsp?MethodType=getOffTypeListinghttp://www.laghu-udyog.com/NASApp/senetwar/ctrlDRSearch.jsp?MethodType=getOffTypeListinghttp://www.laghu-udyog.com/sido/ktdfw01x.htmhttp://www.laghu-udyog.com/sido/ktdfw01x.htmhttp://www.laghu-udyog.com/sido/ktdfw01x.htmhttp://www.ffdcindia.org/training.htmhttp://www.ffdcindia.org/training.htmhttp://www.ffdcindia.org/training.htmhttp://www.ppdcagra.com/http://www.ppdcagra.com/http://www.ppdcagra.com/http://www.estcindia.com/http://www.estcindia.com/http://www.estcindia.com/http://www.idemi.org/training.htmhttp://www.idemi.org/training.htmhttp://www.idemi.org/training.htmhttp://www.idemi.org/training.htmhttp://www.idemi.org/training.htmhttp://www.idemi.org/training.htmhttp://www.estcindia.com/http://www.ppdcagra.com/http://www.ffdcindia.org/training.htmhttp://www.laghu-udyog.com/sido/ktdfw01x.htmhttp://www.laghu-udyog.com/NASApp/senetwar/ctrlDRSearch.jsp?MethodType=getOffTypeListinghttp://www.laghu-udyog.com/sido/sisi.htmhttp://iie.nic.in/http://www.nimsme.org/http://www.nimsme.org/http://niesbud.nic.in/http://niesbud.nic.in/ -
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ECOMOMIC PERFORMANCE
Production
The small-scale industries sector plays a vital role in the growth of
the country. It contributes almost 40% of the gross industrial value
added in the Indian economy. It has been estimated that a million
Rs. of investment in fixed assets in the small scale sector produces
4.62 million worth of goods or services with an approximate value
addition of ten percentage points. The small-scale sector has grown
rapidly over the years. The growth rates during the various plan
periods have been very impressive. The number of small - scale
units has increased from an estimated 0.87 million units in the year
1980-81 to over 3 million in the year 2000. When the performance
of this sector is viewed against the growth in the manufacturing
and the industry sector as a whole, it instills confidence in the
resilience of the small-scale sector.
Employment
SSI Sector in India creates largest employment opportunities for
the Indian populace, next only to Agriculture. It has been estimated
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that 100,000 rupees of investment in fixed assets in the small-scale
sector generates employment for four persons
Generation of Employment - Industry Group-wise
Food products industry has ranked first in generating employment,
providing employment to 0.48 million persons (13.1%). The next
two industry groups were Non - metallic mineral products with
employment of 0.45 million persons (12.2%) and Metal products
with 0.37 million persons (10.2%). In Chemicals & chemical
products, Machinery parts except Electrical parts, Wood products,
Basic Metal Industries, Paper products & printing, Hosiery &
garments, Repair services and Rubber & plastic products, the
contribution ranged from 9% to 5%, the total contribution by these
eight industry groups being 49%. In all other industries the
contribution was less than 5%.
Per unit employment
Per unit employment was the highest (20) in units engaged in
beverages , tobacco & tobacco products mainly due to thehigh employment potential of this industry particularly in
Maharashtra, Andhra Pradesh, Rajasthan, Assam and Tamil
Nadu. Next came
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Cotton textile products, Non- metallic mineral products, Basic
metal industries and Electrical machinery and parts. Per unit
employment was the highest in metropolitan areas and
lowest in rural areas. However, in Chemicals & chemical
products, Non-metallic mineral products and Basic metal
industries per unit employment was higher in rural areas as
compared to metropolitan areas/urban areas. In urban areas
highest employment per unit was in Beverages, tobacco
products (31 persons) followed by Cotton
textile products , Basic metal industries and Non-metallicmineral products.
Location-wise Employment DistributionRural
Non-metallic products contributed 22.7% to employment
generated in rural areas. Food Products accounted for 21.1%,
wood products and chemical products shared between them 17.5%.
Urban
As for urban areas, Food Products and Metal Products almost
Equally shared 22.8% of employment. Machinery parts except
Electrical , Non-metallic mineral products, and Chemicals &
Chemical products between them accounted for 26.2% of
Employment. In metropolitan areas the leading industries were
Metal products, Machinery and parts except electrical and Paper
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products & printing .
Export
SSI Sector plays a major role in India's present export
performance .45%-50% of the Indian Exports is contributed by SSI
sector . Direct exports from the SSI Sector account for nearly 35%
of total exports. Besides direct exports, it is estimated that small-
scale industrial units contribute around 15% to exports indirectly.
This takes place through merchant exporters, trading houses and
export houses. They may also be in the form of export orders from
large units or the production of parts and components for use for
finished exportable goods. It would surprise many to know that
non-traditional products account for more than 95% of the SSI
exports. The exports from SSI sector have been clocking excellent
growth rates in this decade. It has been mostly fuelled by the
performance of garments, leather and gems and jewellery units
from this sector. The product groups where the SSI sector
dominates in exports, are sports goods, readymade garments,
woolen garments and knitwear, plastic products, processed food
and leather products. The SSI sector is reorienting its export
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strategy towards the new trade regime being ushered in by the
WTO.
Opportunity
The opportunities in the small-scale sector are enormous due to the
following factors:
:-Extensive Promotion & Support by Government
:-Less Capital Intensive
:-Reservation for Exclusive Manufacture by small scale
sector
:-Project Profiles
:-Funding - Finance & Subsidies
:-Machinery Procurement
:-Raw Material Procurement
:-Manpower Training
:-Technical & Managerial skills
:-Tooling & Testing support
:-Reservation for Exclusive Purchase by Government
:-Export Promotion
:-Growth in demand in the domestic market size due to
overall
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:-economic growth
:-Increasing Export Potential for Indian products
:-Growth in Requirements for ancillary units due to the
increase in number of green field units coming up in the large
scale sector.
:-Small industry sector has performed exceedingly well
and enabled
:-our country to achieve a wide measure of industrial growth
and diversification.
By its less capital intensive and high labour absorption nature, SSI
Sector has made significant contributions to employment
Generation and also to rural industrialisation. Thissector is ideally
suited to build on the strengths of our traditional skills and
knowledge, by infusion of technologies, capital and innovative
marketing practices. This is the opportune time to set up projects in
the small-scale sector. It may be said that the outlook is positive,
indeed promising, given some safeguards. Thisexpectation is based
on an essential feature of the Indian industry and the demand
structures. The diversity in production systems and demand
structures will ensure long term co-existence of many layers of
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demand for consumer products / technologies / processes. There
will be flourishing and well grounded markets for the same
product / process, differentiated by quality, value added and
sophistication. This characteristic of the Indian economy will allow
complementary existence for various diverse types of units. The
promotional and protective policies of the Govt. have ensured the
presence of this sector in an astonishing range of products ,
particularly in consumer goods. However, the bugbear of the sector
has been the inadequacies in capital, technology and marketing.
The process of liberalization coupled with Government support
will therefore , attract the infusion of just these things in the sector.
Small industry sector has performed exceedingly well and enabled
our country to achieve a wide measure of industrial growth and
diversification. By its less capital intensive and high labour
absorption nature, SSI sector has made significant contributions to
employment generation and also to rural industrialization. This
sector is ideally suited to build on the strengths of our traditional
skills and knowledge, by infusion of technologies, capital and
innovative marketing practices. So this is the opportune time to set
up projects in the small scale sector. It may be said that the outlook
is positive, indeed promising, given some safeguards . This
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expectation is based on an essential feature of the Indian industry
and the demand structures. The diversity in production systems
and demand structures will ensure long term co-existence of many
layers of demand for consumer products / technologies / processes.
There will be flourishing and well grounded markets for the same
Product / process, differentiated by quality , value added and
sophistication. This characteristic of the Indian economy will allow
complementary existence for various diverse types of units. The
promotional and protective policies of the Govt. have ensured the
presence of this sector in an astonishing range of products,
particularly in consumer goods . However, the bug bear of the
sector has been the inadequacies in capital , technology and
marketing . The process ofliberalization will therefore, attract the
infusion of just these things in the sector.
MSME and their role in socio economic development
The importance of Micro, small and medium enterprises (MSME)
for its contribution in the Indian economy growth is a matter of
record and needs no further elaboration. However with the
changing focus from economic growth to inclusive growth, MSME
sector role in the socio economic development of India needs to be
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understood, explored and facilitated. What is so significant about
MSME that makes them special in their relation to socio
economic development of the country?
Here are few facts which may give answer to this question.
Wide spread reach: There are around 12.34 million (1) MSMEs,
including 1.9 million registered one which are spread out across
the length and breadth of India. They may be touching the lives of
123.4million directly or indirectly which is roughly 10% of Indias
population.
Major share in GDP: MSMEs combined output is roughly 7%
of countrys Gross Domestic Production (GDP).
Big employment generator; MSME sector is the second largest
manpower employer in the country next only to agriculture sector.
It provides employment to more than 20 million people which is
roughly 2 % of countrys population. Looked from social angle, it
helps in solving the unemployment and under-employment
problem in the society.
Facilitates balanced regional development: Dispersion of
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MSMEs in all parts of the country helps in removing regional
imbalances by promoting decentralized development of industries.
MSME can be found everywhere, which may be rural, urban,
coastal, desert, mountains, forest, backward/ forward areas. This
decentralized concept also helps in reducing the other problems
like pollution, congestion, housing, sanitations etc.
Helps in equitable distribution of wealth/ income: When the
entrepreneurial talent is allowed to grow in different regions and
areas, the income is also distributed instead of being concentrated
in the hands of few. This help in solving a big social issue of
bridging the gap between rich and poor.
Act as nursery for entrepreneurship: MSMEs provide a natural
habitat for entrepreneurs. Through this platform, the latent/ raw
talent available locally can hone their skills and talents, to
experiments, to innovate and transform their ideas into goods and
services needed by the society.
HOW TO START A SMALL SCALE INDUSTRY
The steps involved in starting a small scale industry are:-
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Product Identification: Conduct market survey and study theproduct as regard their demand in the market.
Check whether it is a seasonal product or it has demandedthroughout the year.
Study similar product available in the market that can beprobable competitor. Analyze them as regards their utility,
quality and cost.
Find whether can be exported. Decide the product that you are going to manufacture, on the
basis of:-
a) Market Surveyb) Financial implication involvedc) Technical knowhow availabled) Experience in the line, etc.
Preparation of preliminary project report to get rough idea on
machinery, raw material and financial requirement.
Select a proper site for locating the unit.
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1. Take a building for factory on hire or construct your ownfactory building.
2. Get yourself conversant with the rules and other informationavailable from small-scale industries, Ministry of Industry,
New Delhi.
3. Prepare a scheme in detail to manufacture the selected productsuch a scheme should include the requirement of and the
approximate cost of:-
i. Land and buildingii. Machinery, tools and other equipment
iii.
Direct labour
iv. Indirect labourv. Direct material cost
vi. Indirect material costvii. Selling and distribution overheads
viii. Working Capital for a unit timeix. Depreciationx. Total production cost per unit time
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xi. Percentage of profit. Make a detailed project report Apply for registration. The scheme after it has been prepared is sent for
approval to the Directorate of Industries of the
particular state.
A small scale unit has to get itself registered with theDirectorate of industries in order to avail various
facilities provided by the government, such as:-
I. Financial assistanceII. Raw materials water and power
III. Import licenseIV. Factory accommodationV. Government order
If required apply for loan.
Apply for income tax and sales tax numbers. Recruit personnel.
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REGISTRATION OF SMALL SCALE INDUSTRIES
REQUIREMENT
Even if State Directorate of Industries does not demand for
licensing under development of SSIs but we should go for its
registration for our profit. Some special things are there which are
necessary to be licensed. The incentive scheme provided by the
government is also provided to those firms which are registered so
for this reason registration is beneficial.
The registration of SSI is of two types:-
1)Provisional registration.2)Permanent registration.
The provisional registration is provided to the unit for starting two
years. This is provided before production. If still the firm could not
run in actual production it can also be renewed by state directorate
of industries.
INCENTIVE FACILITIES
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In every state various incentive schemes are provided for
development of these SSIs. The methods and amounts are
depending on the industrial policy and financial state of that area.
Various facilities are:-
Capital subsidy Diesel generator subsidy Electricity subsidy Project report subsidy Technical know how subsidy Interest subsidy Sales tax subsidy Interest free loan against commercial taxes Seed money assistance
TYPES OF CONSTITUTIONS
The criteria of classification may be depend on limits of statutory
norms, capital investment, quantum of loan, annual income etc.
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Basic names of constitutions are:-
Proprietorship: as its name implies only one person is theowner of the company. All the machinery setup, all
facilities, workers, money investment is in the hand of a
single body. He is the only responsible person for all types
of profits and losses. The only problem in this case is that
all losses and accidents happened are only suffered by the
owner only.
Partnership: in this type two or more person shared thefirm. According to INDIAN PARTNERSHIP ACT 1932 a
partnership deed is prepared in which all the terms and
conditions are included. The firm is drive according to
these terms. In case of any problem all the partners will
suffer equally.
Private limited company: in private limited companythere is minimum two and maximum fifty promoter
director. The registration is done under the company act
1956 under REGISTRAR OF COMPANIES. Company
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made its MEMORANDUM & ARTICLES OF
ASSOCIATION and all the scope of work is regulate
under these.
Public limited company: private limited and publiclimited are almost of same configuration with the only
difference that public limited company can sale its shares
in general public but private limited company is not
authorized to do so.
Co-operative society: under co-operative society act thefirms are registered by state co-operative department. The
group can be minimum of ten members. These are also
work under the norms and conditions made by its own
memorandum and articles of association.
FINANCIAL REQUIREMENT
Since independence, government of India has been giving all
possible encouragement of SSI. A number of organizations have
been step up by the government of India to provide assistance and
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incentive to small scale industry. These packet ages of assistance
are providing to SSI by a large number of organization operative at
national &state level. Development program are being carried out
at two level
1.National Level2.State Level
AGENCIES WHICH WORK AT NATIONAL LEVEL ARE:-
a) Small Scale Industrial Board (SSIB)
b)Small Scale Industries Development Organization (SIDO)c)National Small Scale Industrial Corporation (NSIC).
AGENCIES WHICH WORK AT STATE LEVEL ARE:-
a)State Directorate of Industries (SDI)b)District Industrial Centre (DIC)c)State Small Industrial Corporation (SSIC)d) State Financial Corporations (SFCs)e)Commercial Banksf) Small Industries Development Bank of India (SIDBI).
NATIONAL LEVEL SSIB
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It is all advisory body and comprises state government ministry
office and representative of several institution & association. Its
functioning is to plan, advice &coordinate the activities of center
and state government. As such it does not render direct help to
entrepreneur. However, it helps to government in involving new
polices and program for small scale sector.
SMALL INDUSTRIAL DEVELOPMENT ORGANIZATION
(SIDO)
Its headquarter at Nirman Bhavan, new Delhi headed by the
development commissioner (SSI) has a network of small industries
Service Institute (SISIs) one in each state which help In
economical, technical, industrial information services,
management casualty services, training & marketing.
NSIC
Its headquarter at New Delhi & regional office at Kolkata,
Mumbai, Chennai, Guwahati etc.
Facilities provided:-
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Supply of machine and equipment on hire purchase
1.) Distribution of scare raw material imported components.
2.) Marketing assistance
3.) Assistance to SSI in securing order for railway and defense.
4.) Operating a credit guarantee scheme for those units which are
registered within.
STATE FINANCIAL CORPORATION
Almost every state has its own financial cooperation to provide
machine and long term loans small and medium sale industries.
Amount of loan varies from Rs. 5000 to Rs. 6 Lakh and these are
repayable in equal installments spread over a period of 10-12
years.
Important schemes of financing SFC are
1) A loan scheme for financing of village and cottage industries.
Under this scheme they are financed to the extent of Rs. 25,000
and the interest rate is very low.
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2) Assistance to tiny units these grant assistance up to Rs. 2.00
lakh.
3) Scheme for technical entrepreneur in order to encourage self
employment these corporation provide financial assistance up to
Rs.2.00 lakh at very low interest rate to such technical
entrepreneurs who have acquired a diploma or degree in any
discipline of engineering .
4) Loans to hotel industry
5) Scheme for SC/ST Grant financial assistance to SC/ST
entrepreneurs at a nominal margin rates are charged at the rate of
10%.
6) Scheme for physically handicapped these provide financial
assistance up to Rs. 3.00 lakh at a rate of 10%.
COMMERCIAL BANKS
SBI and its subsidiary banks and other nationalized banks provide
liberal term loans and working capital to small scale entrepreneurs
and these loans are advanced for purchase of machine and material
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and to the technical entrepreneurs to encourage self employment.
Specialized institute like, Central Institute of Tool Design,
Hyderabad, Central Tool Room, Ludhiana and Kolkata, Central
Institute of Hand Tool Jalandhar, Institute for Design of Electrical
Measuring Instruments (IDEMI) Mumbai, Integrated Trading
centre, Nilokhedi, National institute of small Industry Exton,
Hydrabad and National Institute for Entrepreneurship and Small
Business Development. They conduct special courses,
programmers, Workshops, training programmers for the benefits of
small scale industries.
Credit Support
Credit is the prime input for sustained growth of small scale sector
and its availability continued to be a matter of concern. To provide
credit support to the various SSI units various policies have been
formulates by the GOI. Various institutes like SFC, SIDC,
NISC, and SIDBI are providing financial supports to various SSI
units
CONCEPT OF MARKETING
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Studies reveal that different organizations have different
perception of marketing and these different perceptions have led to
the promotion of different concept of marketing. It is found that at
least 5 distinct concept of marketing have guided and are still
guided business terms. They are:
1. Exchange concept.
2. Production concept.
3. Product concept.
4. Sales concept.
5. Marketing concept.
1. Exchange concept:- the exchange concept of marketing as the
name indicates hold that the exchange of a product b/w the seller a
buyer is a central idea of marketing. But a proper scrutiny of the
marketing would readily reveal that marketing is very much
broader than exchange. The other important aspect of marketing
such as concern for the customer, the generation of the venue
satisfaction, the creative selling and integrated action for service
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the customer get completely overshadowed in this concept of
marketing.
2. Production concept: - According to the production concept
marketing is a merely related to production .They believe that
marketing can be managed by managing production. The concept
hold that consumer would as a rule supported these product that
are product in a great volume and allow unit cost organization
voting for this concept are influenced by a drive to produce all that
they can .They do achieve high production efficiency and a
substantial reduction in the unit cost of production. Yet they often
do not get customer as they expected. Customers after all are
motivated by a verity consideration in their purchases. Easy
availability and low cost are not only parameters governing the
costumers buying action and the production concept thus fails to
drive as the right marketing polices for the enterprise.
3. Product concept: - The product concept is somewhat stiff from
the production concept where as the production concept seeks to
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win markets & profits via high volume of production and low unit
cost of production. The product concept to seek to archive the
same results via product excellence, improved product, new
products and ideally design and engendered products. It also places
emphasis on quality assurance. Origination that subscribes to the
product concept of marketing believes that customer goods
automatically vote for products of high quality they spent
considerable energy. Time and money own research and
development brings in a verity of new product. They do not bother
to study the market and consumer in depth. They get totally
embraced with the product and almost forget the customer for
whom the product is actually meant. They fail to find what the
customers actually needs and what they would gladly aspect.
4. Sale concept: - the sale concept maintains that a company
cannot expect its product to get pick up automatically by the
costumer. the company has to consciously promote and push its
heavy advertisement, high power personal selling, large scale sale
promotion, heavy price discount and strong publicity and public
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relation are the normal tool used by the origination that relay on
the concept. Evidently the sale concepts too generate marketing
myopia just as a exchange concept, production concept and
product concept. Its lead to wrong or inadequate understanding of
the market and consequently a total failure in the market place.
5. Marketing concept
Importance of marketing to the society:-
a)Marketing helps to achieve maintain and rise the standard ofliving marketing bring new variety of good to the consumer
and better and rigorous marketing gives soon for mass
production. Under mass production the cost of product is low
people can more goods for their money, which results in high
standard of living.
b)Marketing increases employment opportunity.c)Marketing helps to increases national income.d)Marketing is a connecting link between consumer and
producer.
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e)Marketing helps to maintain stability:-economic stability is thesine of any efficient and dynamic economy and economy
stability is maintained only when there is balance in supply and
demand. If production is more then demand the access goods
cannot be sold at acceptable prices then stokes of goods would
be picked up and there would be glut all the market in fall in
price. Similarly, if production is less then demand price is
shooting up resulting in higher price. In such a situation
marketing maintains the economic stability by balancing
production and consumption.
STEPS IN MARKETING MANAGEMENT
1. Product planning
2. Sale Forecasting
3. Pricing Policy
4. Distribution Strategy
5. Role of Advertising (personal selling)
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6. Quality
1. Product planning:-product planning may be defined as the act
of marketing out and supervising the search, screening,
development and commercialization of new product, modification
of existing line.
Product planning involves three important considerations
a)The development and Induction of new ideas.b)The modification of exiting lines as may be required in term of
changing costumers need and performance.
c)The discontinuance of elimination of marginal or unprofitableproduct.
Product can be classified as:-
1. Customer products
2. Industrial products
3. Defense products
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1. Costumer products:-goods design for use ultimately by the
costumer or household and in such from they can be used without
commercial processing.
2. Industrial products:-goods which are designed to be sold
primarily for use in producing goods destined to be sold primarily
to the ultimate consumers.
3. Sale Forecast Defined: - a sales forecast is an estimate for the
amount or unit sale for a specified future period under a purposed
marketing plan or program.
As define by American marketing association it is an estimate of
sales in dollars or physical units for a specified future period
under a purposed marketing plan or program and under an
assumed set of economic and other forces outside the unit for
which forecast is made.
Marketing of proper sale forecast require an assessment of:-
1 The outside uncontrollable forces likely to influences the
company sales.
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2. The internal proposed changes in the marketing strategies and
tactics of the company which are likely to affect the sale.
Sales forecast can be for a specified product line or can be for a
market as a whole or for any portion of it. According to the time
period, the sales forecast can be divided under three types-
1. Short Run Forecasts: - which generally extends from a few
weeks to about six months or at most one year in future.
Companies mostly do this as day-to-day forecasts for their
production control needs and to plan for long term financial
needs.
2. Medium Range Forecasts: - which extends from one year to
about four years into future.
This type of forecasting is important for
a)Estimating profits, budgeting expenses etc.b)Determining dividing policyc)Deciding rate of maintenance expenditured)Determining schedule of operation.
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It is use full for the following purposes:-
a) Estimating inventory requirement
b) Providing adequate shipping facilities
c) Assessing production worker requirements.
d) Estimating working capital needs
e) Setting production runs for each product
f) Fining sales quotes
3. Long Range Forecast: - Extending to least five years into
futures and in case of really large organization extending over a
longer period up to ten years or even more.
It is useful in following ways:-
1. Anticipating the magnitude and timing of capital expenditures
required for new facilities in the future.
2. Determining probable trends and range of cash inflow from
sales.
3. Estimating companies long range personnel needs.
4. Highlighting futures problems.
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3. Pricing polices: - Pricing is a very critical decision. Pricing
decision is not easy to make. Hence sound pricing policies must be
adopted to ensure that the originations secure satisfactory profit.
For pricing decision a marketing manager has to be familiar with
economic concept useful in pricing decision. He has to consider
various pricing factor which infusing price a part from cost such as
costumer characteristics, the economical product characteristics,
competitive environment and government control whenever
applicable. The pricing of the product materially affected the
demand for it as well as the origination competitive ability for
expenditure if the quality of the product is to be improved this may
be possible only if the costumer are willing to pay higher price for
it. Besides, if the product is not properly priced there might be
reluctance from the channels of distribution.
4. Distribution Strategy: - distribution may be defined as an
operation or a series of operation, which physically bring goods
manufactured or produced by only particular manufactured into the
hands of the final consumers to the users. Distribution strategies
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consist of distribution or sub-dividing the total products of a
manufacturer on a geographical basis to various specific markets.
There may be a state market, a National Market or even a
worldwide market for the production while defining a strategy we
have to deal with two aspects. First, is the organizational aspects, it
is concerned with how and through what channels we should
distribute. For this general marketing policy is responsible for
deciding the various channels for distribution. Secondly, is the
operational aspect of distribution or the physical distribution, it is
concerned with moving of goods from one place to other,
including the warehousing storage and transportation costs as well
includes. These aspects are sometimes described as logistics of
distribution
Advertising: - To counter the market at National and
International level the GOI set up various institutes like:- 1) Export
Credit Guarantee Corporation Ltd. (ECGC)
2) State Trading Corporation. (STC)
3) Trade Development Authority.
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4) National Small Industries Corporation. (NSIC)
Organizational Structure of SSI: - There are 28 SISIs set up in
State Capital and other industrial cities all over the country. The
main activities of these institutions are as follows: -
-Assistance/Consultancy of prospective entrepreneurs.
- Project profiles.
-Entrepreneurship development programmes.
- Motivational campaigns.
-Production index.
- Management development programmes.
-Energy conservation.
-Quality control and up gradation.
-Export promotion.
-Market surveys.
-Intensive technical assistance.
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Organizations under SSI:-
1) Regional Testing Centers (RTCs)
2) Field Testing Stations (FTSs)
3) Tool Rooms / Tool Design Industries (TRs/TDs)
4) Trading institutes:
- National Institute of Small Industry Extension Training
(NISIET)
-National Institute for Entrepreneurship and small business
development (NIESBUD), New Delhi.
-Integrated Training Centre (Industries), Nilokhedi (Haryana).
5) Product-cum- Process Development Centre (PPDICs)
Six centers are in existence. There are:-
- Firozabad for Glass Industry.
- Kannauj for Essential Oils.
- Meerut for Sports Goods and Leisure Time Equipment.
- Agra for foundry and forgings.
- Ramnagar for Electronic Industries.
-Mumbai for Electrical Measuring Instruments.
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The main motive of these centers is to upgrade the technology of
the manufacturer and help in energy conservation.
Training Institutes:- All the three training institutes mentioned
above are an autonomous body and are under the administrative
control of the office of DC (SSI).Their objectives is to identify
and motivate traditional /nontraditional entrepreneurs and to
provide training at National and International level .These
institutes provide training by imparting seminars and workshops
on topical issues . The integrated Training Centre (Industry),
Nilokhedi is the only institute that imparts training to the junior
field staff i.e. Investigators / SIPOs to expose to and educate them
in the programmes and policies of development and promotion of
small industries. At present its training consists of courses like
1) Rewinding of electric motors and house wiring.
2) Repair to diesel engine and agricultural water pumps.
3) Servicing and repair to automobiles (cars and scooters).
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SWOT Analysis
Introduction
Environmental opportunities are only potential opportunities unless
the organization can utilize resources to take advantage of them
and until the strategic leader decides that it is appropriate to pursue
the opportunity. It is therefore important to evaluate environment
opportunities in relation to the strengths and weaknesses of the
organizations resources, and in relation to the organizations
resources, and in relation to the organizational culture. Real
opportunities exist when there is a close fit between environment,
values and resources. An evaluation of an organizations strengths
and weaknesses in relation to environmental opportunities and
threats is generally referred to as a SWOT analysis. The following
report will look closely into the SWOTs concept, its main aspects,
and criteria for successful and effective SWOT analysis.
SWOT is an acronym for Strengths, Weaknesses, Opportunities,
Threats. Occasionally, it may also be found as a WOTS up
analysis or the TOWS analysis. A SWOT analysis is a planning
tool used to understand the Strengths, Weaknesses, Opportunities,
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and Threats involved in a project or in a business. It involves
stating the objective of the business or project and identifying the
internal and external factors that are either supportive or
unfavourable to achieving that objective. SWOT is often used as
part of a strategic or business planning process, but can be useful
in understanding an organisation or situation and decision-making
for all sorts of situations.
The concept
Any organisation undertaking strategic planning will at some point
assess its own strengths and weaknesses. When combined with an
inventory of opportunities and threats in the organisations external
environment, the organisation is effectively making a SWOT
analysis, that is it is establishing its current position in light of its
Strengths, Weaknesses, Opportunities and Threats.
There are several ways of graphically representing the SWOT
analysis matrix or grid. Examples are shown later in this factsheet.
While at first glance the SWOT looks like a simple model and easyto apply, experience shows that to do a SWOT analysis that is both
effective and meaningful, requires time and a significant resource.
It requires a team effort and cannot be done effectively by only one
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person. The SWOT methodology has the advantage of being used
as a 'quick and dirty' tool or a comprehensive management tool,
and that one (the quick) can lead to the other (the comprehensive).
This flexibility is one of the factors that has contributed to its
success.
The term SWOT analysis is in itself a curious term, for a SWOT
is not an analysis in itself, but a number of elements when used
together form a valuable framework for analysis. It is essentially a
summary of a set of previous analyses even if those were just 15
minutes of mini-brainstorming with yourself in front of your
computer although this approach is not recommended! The
analysis, or more correctly interpretation, comes after the SWOT
summary has been produced.
History
The SWOT analysis technique is credited to Albert Humphrey who
led a research project at Stanford University in the 1960s and
1970s using data from leading companies involved in long range
planning processes. The original goal was to identify why
corporate planning failed. Humphrey created a team method forplanning originally called SOFT analysis (Satisfactory,
Opportunity, Fault, Threat) which was used by organisations like
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WH Smith who made it part of their long range planning
programme for almost 20 years.
The thinking behind the tool was:
What is good in the present is Satisfactory. What is good in the future is an Opportunity.
What is bad in the present is a Fault. What is bad in the future is a Threat.
Humphreys work has developed the implementation to use the
SOFT in the context of six categories which provide a framework
by which issues can be developed into actions and managed using
teams:
Product: what are we selling? Process: how are we selling it? Customer: to whom are we selling it? Distribution: how does it reach them?
Finance: what are the prices, costs and investments? Administration: how do we manage all this?
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SWOT / TOWS ANALYSIS: - These can be defined as follows
and can of below type for industry or organization:-
STRENGTH:- Determine an organisations strong points. This
should be from both internal and external customers. Strength is a
resource advantage relative to competitors and the needs of the
markets a firm serves or expects to serve. It is a distinctive
competence when it gives the firm a comparative advantage in the
marketplace.
WEAKNESS:-Determine an organisations weaknesses, not only
from its point of view, but also more importantly, from customers.
Although it may be difficult for an organisation to acknowledge its
weaknesses it is best to handle the bitter reality without
procrastination. A weakness is a limitation or deficiency in one or
more resources or competencies relative to competitors that
impedes a firms effective performance
OPPORTUNITIES:- Another major factor is to determine how
organisations can continue to grow within the marketplace. After
all, opportunities are everywhere, such as the changes in
technology, government policy, social patterns, and so on. An
opportunity is a major situation in a firms environment. Key
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trends are one source of opportunities. Identification of a
previously overlooked market segment, changes in competitive or
regulatory circumstances, technological changes, and improved
buyer or supplier relationships could represent opportunities for the
firm.
THREATS:- No one likes to think about threats, but we still have
to face them, despite the fact that they are external factors that are
out of our control, for example, the recent economic slump in Asia.
It is vital to be prepared and face threats even during turbulent
times. A threat is a major unfavourable situation in a firms
environment. Threats are key impediments to the firms current or
desired position. The entrance of new competitors, slow market
growth, increased bargaining power of key buyers or suppliers,technological changes, and new or revised regulations could
represent there threats to a industrials firms success.
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TABLES & DIAGRAM:-
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How to Write a Good SWOT Analysis
In order to write a good SWOT the following criteria must be
taken
Make your points long enough, and include enough detail, to
make it plain why a particular factor is important, and why it can
be considered as a strength, weakness, opportunity or threat.
Include precise evidence, and cite figures, where possible;
Be a specific as you can about the precise nature of a firms
strength and weakness. Do not be content with general factors like
economies of scale;
Avoid vague, general opportunities and threats that could be put
forward for just about any organisation under any circumstances;
Do not mistake the outcomes of strength (such as profits and
market share) for strengths in their won right;
Improvements is not the same as strength do not confuse the
two.
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Avoid contradicting yourself in the course of the analysis, by
having strengths and weaknesses that are essentially different
aspects of the same strategy of resource. Come to a reasoned
conclusion about whether the good points outweigh the bad ones.
Situational analysisSWOT ANALYSIS
Translating SWOT issues into actions under the six categories1.Product (what are we selling?)2.Process (how are we selling it?)3.Customer (to whom are we selling it?)4.Distribution (how does it reach them?)5.Finance (what are the prices, costs and investments?)6.Administration (and how do we manage all this?)
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SWOT ANALYSIS DIAGRAM
Quadrant 1 is the most desirable position. The firm faces a lot ofopportunities and with complimentary internal strengths to execute
those opportunities. That situation supports growth oriented
strategies to exploit or capitalize on the match. Microsoft and
American Online companies follow this intensive development
strategy. The least favourable situation would be quadrant 4. The
firm faces many environmental threats and it is in a weak position.
This situation will call for strategies that reduce or redirect
involvement in the products or markets examined by SWOT
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analysis. A lot of companies in an insolvent situation may fall into
this segment.
A firm in quadrant 2 with key strengths would face an unfavorable
environment. The strategies here is to use current strengths to build
long term opportunities in better product markets. Transportation
firms such as Greyhound bus company when faced with long term
threats such as increased competition from rail and airlines and
rising costs diversified into non passenger services such as freight
and financial services.
A firm in quadrant 3 encounters impressive and favourable market
opportunity but is constrained by internal weaknesses. The strategy
for this firm is to focus on eliminating the internal weaknesses so
that market opportunities can be pursued more effectively.
SWOT analysis provides an excellent means through which
managers can examine their firms current positions. However it
does not detail or show how firms try to identify or spot internal
strengths and weaknesses. A Functional Analysis whereby
departments such as Marketing, Finance Information Systems and
Operations are thoroughly examined to detect past trends of sales,
costs, profitability and productivity. These results are compared
with industry standards. This further reduces the analysis to Value
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Chain Analysis - dividing the firm into sets of separate activities
that add value.
SWOT analysis is a simple framework for generating strategic
alternatives from a situation analysis. The SWOT framework was
described in the late 1960's by Edmund P. Learned, C. Roland
Christiansen, Kenneth Andrews, and William D. Guth in Business
Policy, Text and Cases (Homewood, IL: Irwin, 1969). The
following diagram shows how a SWOT analysis fits into a
strategic situation analysis.
Situation Analysis
/ \
Internal Analysis External Analysis
/ \ / \
Strengths Weaknesses Opportunities Threats
|
SWOT Profile
The internal and external situation analysis can produce a large
amount of information, much of which may not be highly relevant.
The SWOT analysis classifies the internal aspects of the company
as strengths or weaknesses and the external situational factors as
opportunities or threats. By understanding these four aspects of its
situation, a firm can better leverage its strengths, correct its
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weaknesses, capitalize on golden opportunities, and deter
potentially devastating threats.
Internal Analysis
The internal analysis is a comprehensive evaluation of the internal
environment's potential strengths and weaknesses. Factors should
be evaluated across the organization in areas such as:
Company culture Company image Organizational structure Key staff Access to natural resources Position on the experience curve
Operational efficiency Operational capacity Brand awareness Market share Financial resources Exclusive contracts Patents and trade secrets
The SWOT analysis summarizes the internal factors of the firm as
a list of strengths and weaknesses.
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External Analysis
An opportunity is the chance to introduce a new product or service
that can generate superior returns. Opportunities can arise when
changes occur in the external environment. Many of these changes
can be perceived as threats to the market position of existing
products and may necessitate a change in product specifications or
the development of new products in order for the firm to remain
competitive. Changes in the external environment may be related
to:
Customers Competitors Market trends Suppliers Partners Social changes New technology Economic environment Political and regulatory environment
Markets (customers) Competition Technology Supplier markets
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Labour markets The economy The regulatory environment The last four items in the above list are macro-environmental
variables, and are addressed in a PEST analysis.
The SWOT analysis summarizes the external environmental
factors as a list of opportunities and threats.
SWOT Profile
When the analysis has been completed, a SWOT profile can be
generated and used as the basis of goal setting, strategy
formulation, and implementation. The completed SWOT profile
sometimes is arranged as follows:
Strengths Weaknesses
1.
2.
3.
1.
2.
3.
Opportunities Threats
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1.
2.
3.
1.
2.
3.
Applications and when to use it
A SWOT analysis can be used for:
Workshop sessions Brainstorm meetings Problem solving Planning Strategic planning Product evaluation Competitor evaluation Personal development planning decision making
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Subject of SWOT analysis:
(define the subject of theanalysis here)
Strengths
Advantages ofproposition
Capabilities Competitive advantages USP's (unique selling
points)
Resources, Assets,People
Experience, knowledge,data
Financial reserves, likelyreturns
Marketing - reach,distribution, awareness
Innovative aspects Location and
Weaknesses
Disadvantages ofproposition
Gaps in capabilities Lack of competitive
strength
Reputation, presence andreach
Financials Own known
vulnerabilities
Timescales, deadlinesand pressures
Cash flow, start-up cash-drain
Continuity, supply chain
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geographical
Price, value, quality Accreditations,
qualifications,
certifications
Processes, systems, IT,communications
Cultural, attitudinal,behavioural
Management cover,succession
robustness
Effects on core activities,distraction
Reliability of data, planpredictability
Morale, commitment,leadership
Accreditations, etc
Processes and systems,etc
Management cover,succession
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Opportunities
Market developments Competitors'
vulnerabilities?
Industry or lifestyletrends
Technologydevelopment and
innovation
Global influences New markets, vertical,
horizontal
Niche target markets Geographical, export,
import
New USP's Tactics - surprise, major
contracts, etc
Business and product
Threats
Political effects Legislative effects Environmental effects IT developments Competitor intentions -
various
Market demand New technologies,
services, ideas
Vital contracts andpartners
Sustaining internalcapabilities
Obstacles faced Insurmountable
weaknesses
Loss of key staff Sustainable financial
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development
Information andresearch
Partnerships, agencies,distribution?
Volumes, production,economies
Seasonal, weather,fashion influences
backing
Economy - home, abroad Seasonality, weather
effects
Advantages and disadvantages of using SWOT analysisAdvantages
Simple four box framework. Facilitates an understanding of the strengths and weaknesses
of the organisation.
Encourages the development of strategic thinking. Enables a management team to focus on strengths and build
opportunities.
Can enable an organisation to anticipate future businessthreats and take action to avoid or minimise their impact.
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Can enable an organisation to spot business opportunities andexploit them fully.
Flexible.
Disadvantages
Some users over simplify the amount of data used fordecisionsit is easy to use scant data.
To be effective this process needs to be undertaken on a
regular basis.
The best reviews require different people being involvedeach having a different perspective.
Access to quality internal data sources, this can be timeconsuming and politically difficult (especially in more
complex organisationsparent company etc).
The pace of change makes it increasingly difficult toanticipate developments that may affect an organisation in
the future.
The risk of capturing too much data is that it may make itdifficult to see the wood for the trees and lead to paralysis
by analysis. The data used in the analysis may be based on assumptions
that subsequently prove to be unfounded (good and bad).
Lacks detailed structureso easy to miss key elements.
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SWOT analysis dos and donts
DO get other people involved. DO exploit any expertise and resources that are already
available within the organisation.
DO use SWOT analysis in conjunction with other techniques,such as PESTLE analysis, PRIMO-F analysis, Porter's five
forces, competitor analysis or scenario planning etc.
DO incorporate your analysis within an ongoing process formonitoring changes in the business environment.
DONT try to do this on your own. DONT jump to conclusions about the future based on the
past or the present.