Friday, March 12, 2010

Moldovan Business Project - a SWOT analysis

Steve Jobs has just launched the new iPod, while the Moldovans invest in the following project "Tarancuta":
Whatch the video and answer the following questions:
a) What is your overall opinion of the invention and its effectiveness? Why was it invented?
b) How many samples has the inventor sold so far? Who are his customers?
c) Would you invest in such a project? Why? Why not?
Now, you are going to work on a SWOT analysis of this project. Please analyze it according to the following system:
1) SWOT analysis template 
2) Free SWOT Examples 
Based on your own SWOT, please answer: IS THIS PROJECT WORTH INVESTING MONEY IN? Why? Why not? Good luck!


  1. I could not believe about the existence of this invention until I saw this video. The inventor is a real Moldovan as he thinks about his fellows.
    But, to be serious I do not think this is such a “good” project to be invested in. I know that life in the village is really hard, and people have to till a lot there, especially in summer, but this machine will not actually help them. Nevertheless, there are almost 50 people who paid 2 500 MDL for “Ţărăncuţa”. As I understood, they would have been more satisfied by the invention if it had weighed less than 15 kilos.
    I would not invest in such a project because this money can be invested in many other kind of projects than this one. There a lot of hospitals or schools in villages that have no funds to be renovated, orphanages that are forgotten by rest of the world... I believe that investing money in charity or renovation projects (and taking good care that it is invested in the right direction) would be much useful and this would bring more happiness to children than to those who breath that gas and hear that awful sound of “Ţărăncuţa”.

  2. Dear FB students,
    please watch the video and do a SWOT analysis of the project. Follow the following guidelines:

    A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include:

    * patents
    * strong brand names
    * good reputation among customers
    * cost advantages from proprietary know-how
    * exclusive access to high grade natural resources
    * favorable access to distribution networks


    The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses:

    * lack of patent protection
    * a weak brand name
    * poor reputation among customers
    * high cost structure
    * lack of access to the best natural resources
    * lack of access to key distribution channels

    In some cases, a weakness may be the flip side of a strength. Take the case in which a firm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.


    The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include:

    * an unfulfilled customer need
    * arrival of new technologies
    * loosening of regulations
    * removal of international trade barriers


    Changes in the external environmental also may present threats to the firm. Some examples of such threats include:

    * shifts in consumer tastes away from the firm's products
    * emergence of substitute products
    * new regulations
    * increased trade barriers

  3. A SWOT analysis process generates information that is helpful in matching an organization or group’s goals, programs, and capacities to the social environment in which it operates. Note the SWOT itself is only a data capture - the analysis follows.


    Positive tangible and intangible attributes, internal to an organization.
    They are within the organization’s control.

    Factors that are within an organization’s control that detract from its ability to attain the desired goal.
    Which areas might the organization improve?

    External attractive factors that represent the reason for an organization to exist and develop.
    What opportunities exist in the environment, which will propel the organization?
    Identify them by their “time frames”

    External factors, beyond an organization’s control, which could place the organization mission or operation at risk.
    The organization may benefit by having contingency plans to address them if they should occur.
    Classify them by their “seriousness” and “probability of occurrence”.

  4. In order to apply the SWOT analysis to this project, have a look at NIKE's sample:

    Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets.' Nike has a healthy dislike of is competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the games. Nike did not. However Nike sponsored the top athletes and gained valuable coverage.
    Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. If prices rise, and products can be made more cheaply elsewhere (to the same or better specification), Nike will move production.
    Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is instantly recognisable, and Phil Knight even has it tattooed on his ankle.
    The organization does have a diversified range of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes.
    The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. However, most of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the consumer. Can you tell one sports retailer from another? So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike.
    Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike product do not always buy it to participate in sport. Some would argue that in youth culture especially, Nike is a fashion brand. This creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes.
    There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend to have associated with them, high profits.
    The business could also be developed internationally, building upon its strong global brand recognition. There are many markets that have the disposable income to spend on high value sports goods. For example, emerging markets such as China and India have a new richer generation of consumers. There are also global marketing events that can be utilised to support the brand such as the World Cup (soccer) and The Olympics.
    Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands.
    The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stamford Business School days (high value branded product manufactured at a low cost) is now commonly used and to an extent is no longer a basis for sustainable competitive advantage. Competitors are developing alternative brands to take away Nike's market share.
    As discussed above in weaknesses, the retail sector is becoming price competitive. This ultimately means that consumers are shopping around for a better deal. So if one store charges a price for a pair of sports shoes, the consumer could go to the store along the street to compare prices for the exactly the same item, and buy the cheaper of the two. Such consumer price sensitivity is a potential external threat to Nike.

  5. Check on the following templates - they will definetely help you write a good SWOT for "Tarancuta":

  6. Strengths:
     Differentiating feature. “Tarancuta” is an innovation that will certainly captivate Moldovan rural population by its efficiency and saving of time.
     Competitive advantage. As this project is a new implemented one, it has no competitors yet.
     Orientation to a narrow niche. It is directed to the agricultural field that most of Moldovan population is involved in.

     Old-fashioned technology based mechanism. Its annoying sound and heavy weight does not correspond to the required characteristics.
     High cost structure. “Tarancuta” is not affordable to every citizen of Moldova as the price doesn’t correspond to the earned income of a farmer.
     Additional expenses for maintenance of work capacity. As it functions only with the help of an engine, it requires additional expenses on fuel.

     Less usage of labor force during season works. With the help of this invention people can save on hiring additional workers to plow land.
     Time management. It creates the opportunity to execute more work in less time.

     Appearance of a foreign competitor on Moldovan market that will offer same product with a more reasonable price.
     Difficulties in usage by its carelessness execution.

    According to my SWOT analysis I consider that this project would be attractive and necessary for the agricultural sector, but as an investor I would not assume my risk to finance it. “Tarancuta” is a “luxury” product for Moldovan farmers. That’s why invested money would probably not be returned.