SWOT Analysis

Strengths Specialist marketing expertise Exclusive access to natural resources Patents New, innovative product or service Location of your business Cost advantage through proprietary know-how Quality processes and procedures Strong brand or reputation	Weaknesses Lack of marketing expertise Undifferentiated products and service (i.e. in relation to your competitors) Location of your company Competitors have superior access to distribution channels Poor quality of goods or services Damaged reputation
Opportunities Developing market (China, the Internet) Mergers, joint ventures or strategic alliances Moving into new attractive market segments A new international market Loosening of regulations Removal of international trade barriers A market that is led by a weak competitor	Threats A new competitor in your own home market Price war Competitor has a new, innovative substitute product or service New regulations Increased trade barriers A potential new taxation on your product or service

 

Any organization must try to create a fit with its external environment. The SWOT diagram is a very good tool for analyzing the (internal) strengths and weaknesses of a corporation and the (external) opportunities and threats. However, this analysis is just the first step. To really create the fit with the external environment is often the most difficult work.

 

Confrontation Matrix

A tool to combine the internal factors with the external factors is the Confrontation Matrix.

 

	Opportunities	Threats
Strengths	Offensive make the most of these	Adjust restore strengths
Weaknesses	Defensive watch competition closely	Survive turn around

 

Often in reality the two columns of the SWOT diagram are pointing in opposite directions. Strategists must still deal with the paradox of creating alignment. This can be done via Outside-in strategy formulation (market-driven strategy) or Inside-out strategy formulation (resource-driven).

Note: you can also apply a SWOT analysis to competitors, often providing interesting new perspectives.

 

SWOT Analysis Special Interest Group

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SWOT Analysis Forum

Recent User Comments

- Dubai

SWOC

"The "T" in SWOT can be changed to "C" for Challenge to take a more positive attitude."

3

pradeep - India

Competetive Analysis with SWOT

"Is only a SWOT Analysis enough for competitive analysis or should it be combined with other techniques?"

2

Lesley - England

SWOT Reference

"I need to reference the SWOT model.. Can anyone give a definitive source for the SWOT? I see it was adapted from an original model by Albert Humphrey who developed the SOFT model. I need to reference for my Post Grad course."

9

Arpon Huang - China

SWOT Analysis is Teamwork

"To illustrate all aspects of each of the factors in SWOT model, it requires a full understanding of the external and internal critical success factors or drivers which could impact the development of the future strategy. To avoiding factors are overlooked, I suggest to have a team work together to find out as much factors as they can to make sure the effective and useful factors can be the key drivers to conduct a TOWS perfectly."

1

Ayub - Canada

SWOT - Absolutely essential

"This is the most important tool companies around the globe will need to survive and grow in our current uncertain economic climate!"

20

Best User Comments

- india

SWOT analysis

"As an MBA student, when we started to learn SWOT analysis it was difficult for us to understand, but once I found that it is so simple to learn. once we learnt it properly it became very easy to interprete it. SWOT analysis is simple and easy way to judge any organization or you can say any brand. its simply balance card of positive and negative sides of organization or brand. if there is imbalance in that balance card, whole organization or brand has to pay for that mean it high lights loss part of firm. "

32

Fred Moran - USA

SWOT Process Steps

"Here's a list of typical phases in a medium size SWOT process (modify as needed). 1. Determine clear objective(s) 2. Determine SWOT team (size, level, find good facilitator and contributors (mix of experts and creative people) 3. Gather Information / Research (who does what) 4. Prepare SWOT workshop (timing, find a suitable room, create a free open atmosphere, agenda with times, send invitations) 5. Workshop - Brainstorm and list the Strengths 6. Workshop - Brainstorm and list the Weaknesses 7. Workshop - Brainstorm and list the Opportunities 8. Workshop - Brainstorm and list the Threats 9. Workshop - Evaluate and Prioritize (use objectives) 10. Communicate the Results 11. Implement the Results 12. Monitor the Results"

22

Sabelo - SA

Significance of SWOT Analysis

"I have been given an assignment on SWOT Analysis and had no clue of what SWOT Analysis is, but in my research I became aware of what is it all about. I have noticed its significance and seen that realy all organizations are using it. It is realy confirmed to me that if it is used to the best it yields good results."

18

Debbie Rosaforte - US

Uses of SWOT analysis

"A SWOT analysis is frequently used in an early stage of strategic or marketing planning for decision-making, problem solving, and as a tool to increase the awareness of certain people about the situation the firm is in. But you can also use SWOT as a personal career planning tool to assess and reflect upon your own personal Strenghts, Weakenesses, Opportunites and Threats. Likewise, within the personnel department we can use SWOT to assess candidates for a function. You can even perform a SWOT on your football or hockey team..."

18

Lorenzo - UK

Opportunity or Threat?

"There can be considerable debate about what is a threat and what is an opportunity. When a company spots a new trend early and acts upon it well, then it has an opportunity. If another company does not see the same trend coming, or fails to act upon it well, then it is facing a threat. Furthermore, people with an entrepreneurial or can-do mentality view almost anything as an opportunity, while pessimistic, bureaucratic people view almost anything as a threat."

18

Gianvittorio - Netherlands

SWOT or (maybe better) TOWS?

"While I was teaching Business Policy, I noted the limitation of the SWOT analysis because students did not take the next step in developing alternative strategies based on the internal strengths and weaknesses and the external opportunities and threats. Consequently, I developed the TOWS Matrix. The original article "The TOWS Matrix--A Tool for Situational Analysis" was published in LONG RANGE PLANNING, Vol. 15, No. 2, 1982, pp. 54-66. This model has been used for research and strategy formulation around the globe. In the meantime, I applied the concept to career strategy as well as for analyzing the competitive advantages of nations. More information can be found on my website shown below. I trust that I shed some light at the origin and further development of the TOWS Matrix concept. usfca.edu/fac_staff/weihrichh/docs/tows.pdf"

16

Jake Vance - US

SWOT Strengths and VRIO test

"In order to analyze true, valid strengths in a SWOT Analysis, you can use the VRIO test: VALUE - Does the strength generate efficiency or more effectiveness? RARE - Is the strength also posessed by many competitors? IMITABILITY - Hard to copy / imitate? ORGANIZATIONAL - Can it be exploited by this organization?"

15

Khushboo - India

What is SWOT analysis?

"A SWOT analysis is like showing a mirror to oneself. It tells where the person stands. Strength: gives power. One should analyse his Weakness. Opportunities should be grabbed and one should overcome his Threats."

13

Duncan - Holland

Ranking model for the Opportunities and Threats

"In order to remove subjectivity in ranking Opportunities and Threats I am looking for a ranking model/theory/approach which could be used to rank the Opportunities and Threats. Does anyone have experience in using a ranking model, other than using the outcome of a brainstorm session. When working in a small team or as an individual this would be too subjective for my use. Thanks in advance for any thoughts on this matter. Duncan"

12

Mark - DK

SWOT as a tool

"It is my experience that the SWOT analysis as a standalone tool is not better than a simple brainstorming process focused on the four different issues. In order to make it work, it is necessary to work several other analysis e.g. value chain analysis, competitor analysis, PEST analysis, Porters five forces, financial analysis etc before you can determine if you have a solid case. Otherwise you don't have any kind of proof to support why you think that your technology for instance is superior to your competitors, or that lack of size is a threat in the global competition. Only after you have done the initial work, you will be able to harvest the real value of the SWOT and if you decide to go a step further the TOWS matrix (=confrontation matrix)."

9

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Compare with: Core Competence  |  Parenting Advantage  |  Porter's five forces model  |  Outsourcing  |  Industry Change  |  OODA Loop  |  BCG Matrix  |  GE Matrix

 

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