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 (26 topics) Help
  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?...
     
  Brainstorming a SWOT Analysis
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...
     
  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 co...
     
  Confrontation Matrix
I am using the SWOT analysis with my research and find it really helpfull. This site however displays a wrong confrontation matrix. The T/S cell must be Defending and the O/W cell must be Improvement. So or change this or put the SWOT in right order ...
     
  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....
     




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Expert Tips - SWOT Analysis Premium
  Steps of Typical SWOT Process - SWOT Analysis
 
  SWOT Strengths and VRIO test - Thoroughly Analyzing Strengths
 
  SWOT Dos and Donts - Successful Implementation
 
  10 SWOT Golden Rules - SWOT Implementation, SWOT Best Practices
 
  SWOT Applications and Aims - SWOT Insight
 
  Critics on SWOT Analysis - SWOT PItfalls, Improve your Usage of SWOT
 
  How to Attribute Scores to All SWOT Factors - SWOT Analysis Implementation
 
  SWOT Disadvantages - SWOT in Strategic Planning
 
  SWOT Advantages - SWOT in Strategic Planning
 
  Questions to Analyze the External Environment - External Environment Analysis
 
  History of SWOT. Early Strategic Planning - Background SWOT Analysis
 

Resources - SWOT Analysis Premium
Internal Analysis - Strategic Analysis
SWOT Anaylsis - SWOT Anaylsis
SWOT Analysis with Example - Self SWOT Analysis
SWOT Analysis - SWOT Analysis
SWOT, SOFT Diagrams - SWOT, SOFT Analysis
TOWS Matrix (Heinrich) - 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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