SWOT Analysis

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Identifying Strengths, Weaknesses, Opportunities and Threats.

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SWOT Analysis

What is a SWOT analysis? Description

A SWOT analysis is a tool, used in management and strategy formulation. It can help to identify the Strengths, Weaknesses, Opportunities and Threats of a particular company. 


Strengths and weaknesses are internal factors that create value or destroy value. They can include assets, skills, or resources that a company has at its disposal, compared to its competitors. They can be measured using internal assessments or external benchmarking.


Opportunities and threats are external factors that create value or destroy value. A company cannot control them. But they emerge from either the competitive dynamics of the industry/market or from demographic, economic, political, technical, social, legal or cultural factors (PEST).


Typical examples of factors in a SWOT Analysis diagram:


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


Defensive

restore strengths

Weaknesses

 

Strenghten

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 Forum
  Using SWOT Analysis for Supplier Audits
This would be a good tool to use during the evaluation of a supplier like when conduction a quality audit.
How would I draft such a report? Would I just comment on each area, e.g., S, W, O and T.
What would a project manager or procurement ...
     
 
  Involve Stakeholders in SWOT Analysis
Usually SWOT analysis is used by middle or higher managers/decision makers who are responsible for strategic planning. But don't overlook anyone else in the creation stage!
While it is possible to develop a SWOT analysis in a small group, it wil...
     
 
  Be Careful with Viewing Industry Opportunities as Company Opportunities
Managers are advised to guard against considering every industry opportunity as a company opportunity. An opportunity without the MEANS to capture it is an illusion.
To capture an opportunity it must match up with the financial and other resourc...
     
 
  SWOT Analysis as a Brainstorming Technique
SWOT analysis can be used in each organization. It can be used as brainstorming technique where individuals come up with distinctive ideas about the strengths, weaknesses, opportunities and threats of the busi...
     
 
  WHEN to do a SWOT Analysis?
At what stage should an organization develop a SWOT analysis?
At the inception or developing stage?...
     
 
  Internal Opportunities and Threats
What about the opportunities and threats that exist within the organization and we are not aware about them? How we will evaluate them through SWOT framework?...
     
 
  SWOT Analysis Strength
I think companies strategies on which company is working and that is giving positive response from a long time is its strength.
Therefore
"strategies giving positive response is the strength"....
     
 
  SWOT Analysis for British Airways and Ryan Air
Would anybody be able to suggest some key points to include under SWOT for the above firms.
I'm having problems keeping it short and succinct as well as assessing what are actually relative strengths and weaknesses....
     
 
  Combine SWOT Analysis with 5 Ps
I always do a SWOT analysis against the 5 Ps. People, Product, Promotion, Place and last of all Price....
     
 
  Design Shool Theory vs. SWOT
Whats the difference between a SWOT analysis and the Design School Theory?...
     
 
  Turning Competitor's Weaknesses Into Opportunities
How can I turn my rival's internal weaknesses into my opportunities since some companies succeed in keeping their internal weaknesses as a secret to themselves?...
     
 
  SWOT and Strategic Marketing Process
How does the SWOT analysis relate to the strategic marketing process (SMP)?...
     
 
  SWOT Analysis + Weightage
SWOT analysis is a basic tool for any marketing manager to determine their future strategies. But just listing the strengths, weaknesses, opportunities and threats are not adequate especially for the challenging business environment. Sometimes manage...
     
 
  Well suited for Crisis too
In this moment of crisis, I never see a better tool for help us in our decisions. This analysis model gives the necessary matrix for fast and proper action....
     
 
  Swot Analysis Well Suited as First Step
Swot becomes an effective tool for analysing competitiveness only when it is used as first step. Other frame work such as Porters' five forces, benchmarking and pest need to come into play before final analysis, decisions and strategy is formulated....
     
 
  SWOC Analysis instead of SWOT Analysis
The "T" in SWOT can be changed to "C" for Challenge to create a more positive attitude....
     
 
  Competetive Analysis with SWOT
Is only a SWOT Analysis enough for competitive analysis or should it be combined with other techniques?...
     
 
  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!...
     
 
  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...
     
 

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Best Practices - SWOT Analysis Premium
  How to Proceed after the SWOT Analysis to the Strategy?
What should we do after the SWOT analysis. In other words, depending on the SWOT outcomes, what strategy can we use?...
     
 
  Combining SWOT with other Strategy Tools
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.  
   
 
  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...
     
 

Expert Tips - SWOT Analysis Premium
 

Steps of Typical SWOT Process

Here's a list of typical phases in a medium size SWOT process (modify as needed).
1. Determine clear objective(s)
2. Determine SWOT t...
Usage (application): SWOT Analysis
 
 
 

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 efficie...
Usage (application): Thoroughly Analyzing Strengths
 
 
 

SWOT Dos and Donts

- Do create an environment that stimulates active contribution of all members participating in the SWOT analysis.
- Do take into consideration, w...
Usage (application): Successful Implementation
 
 
 

10 SWOT Golden Rules

1. Precisely specify all factors to be listed. Avoid gray areas and misinterpretable data.
2. Consider realistically strengths and weaknesses of ...
Usage (application): SWOT Implementation, SWOT Best Practices
 
 
 

SWOT Applications and Aims

The SWOT Analysis can be generally carried out on: a product, a brand, a servic...
Usage (application): SWOT Insight
 
 
 

Critics on SWOT Analysis

Although over the last 40 years SWOT Analysis has been widely used and appreciated as an effective technique for strategic analysis, some major academ...
Usage (application): SWOT PItfalls, Improve your Usage of SWOT
 
 
 

How to Attribute Scores to All SWOT Factors

A typical best practice in implementing a SWOT Analysis is to attribute a score to all factors that represent strengths, weaknesses, threats and oppor...
Usage (application): SWOT Analysis Implementation
 
 
 

SWOT Disadvantages

Here are the main disadvantages of using a SWOT Analysis for Strategic Planning<...
Usage (application): SWOT in Strategic Planning
 
 
 

SWOT Advantages

Here following are the main advantages of using a SWOT analysis for Strategic Pl...
Usage (application): SWOT in Strategic Planning
 
 
 

Questions to Analyze the External Environment

When performing a SWOT Analysis, a common practice is to ask the following 7 questions to analyze the external environment:
1. How can int...
Usage (application): External Environment Analysis
 
 
 

History of SWOT. Early Strategic Planning

The origin of the SWOT Analysis has been credited to Albert Humphrey in the 1960s. At that time he was leading a research project at Stanford Universi...
Usage (application): Background SWOT Analysis
 
 

Resources - SWOT Analysis Premium

Internal Analysis

Comprehensive presentation about the internal part of strategic analysis. Includes: SWOT, BSC, defining objectives, recognizing importance of customer...
Usage (application): Strategic Analysis
 

SWOT Analysis

Presentation by Shabbar Suterwala with some good graphics....
Usage (application): SWOT Analysis
 

SWOT Analysis with Example

Lecture about SWOT Analysis by Shashi includes self analysis....
Usage (application): Self SWOT Analysis
 

SWOT Analysis

Short presentation by Carlos A. Benito about SWOT analysis distinguishes internal factors and external factors plus some guidelines....
Usage (application): SWOT Analysis
 

Techniques for Entrepreneurial Thinking

This presentation elaborates on the different types of thinking for successful entrepreneurship. The presentation includes the following sections:
...
Usage (application): Entrepreneurship, Critical Thinking, Creative Thinking, Lateral Thinking, Entrepreneurial Thinking
 

SWOT, SOFT Diagrams

Download and edit this 12manage PowerPoint graphic for limited personal, educational and business use. Republishing in intranets, websites, books, ma...
Usage (application): SWOT, SOFT Analysis
 

TOWS Matrix (Heinrich)

In-depth article by Prof. Klaus Weihrich introducing and explaining the TOWS Matrix. Also called confrontation matrix....
Usage (application): TOWS Analysis, SWOT Analysis
 
 

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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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