SWOT Analysis Summary and Forum

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).

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.

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Current forum discussions about SWOT Analysis:

Be Careful with SWOT Analysis. Issues, Risks and Limitations of SWOT
I am not that happy with SWOT Analysis. My issue does not concern the tool itself, but the way it is often used. People like to make some statements with it, but the list in each of its quadrants can ...

34 comments

The Importance of SWOT Analysis. Significance
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 real...

14 comments

WHEN to do a SWOT Analysis?
At what stage should an organization develop a SWOT analysis? At the inception or developing stage?...

8 comments

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 n...

4 comments

So Many Application Areas 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 situat...

15 comments

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Expert Tips

Advanced insights about SWOT Analysis. Here you will find professional advices by experts.

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Practical Implementation Tips

	Steps of Typical SWOT Process. Facilitator Checklist SWOT Analysis Here's a list of typical phases in a medium size SWOT process (modify as needed). 1. Determine clear objective(s) 2. D...
	Hot to test the SWOT Strengths you've found Thoroughly Analyzing Strengths In order to analyze true, valid strengths in a SWOT Analysis, you can use a VRIO test: VALUE - Does the strength genera...
	SWOT Dos and Donts Successful Implementation - Do create an environment that stimulates active contribution of all members participating in the SWOT analysis. - Do ...

Information Sources

Various sources of information regarding SWOT Analysis. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

	Internal Analysis Tools and Frameworks Strategic Analysis Comprehensive presentation about the internal part of strategic analysis. Includes: SWOT, BSC, defining objectives, reco...
	Introduction to SWOT Analysis 101 SWOT Analysis Basic presentation introducing SWOT by Shabbar Suterwala with some good graphics....
	TOWS Matrix In-depth TOWS Analysis, SWOT Analysis In-depth article introducing and explaining the TOWS Matrix by Prof. Klaus Weihrich. Also called confrontation matrix....
	SWOT Analysis with Self Analysis Example Self SWOT Analysis Lecture about SWOT Analysis by Shashi includes self analysis....