SWOT Analysis

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Identifying Strengths, Weaknesses, Opportunities and Threats.


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.


Special Interest Group - SWOT Analysis


Special Interest Group (1335 members)


Forum - SWOT Analysis  

Here you will find interesting and educational discussions.


  SWOT - Absolutely essential (2 reactions)
This is the most important tool companies around the globe w...
 
 
 
 
  What is SWOT analysis? (1 reactions)
A SWOT analysis is like showing a mirror to oneself. It tell...
 
 
 
 
  Significance of SWOT Analysis (2 reactions)
I have been given an assignment on SWOT Analysis and had no ...
 
 
 
 
  SWOT Analysis Strength
I think companies strategies on which company is working and...
 
 
 
 
  Internal Opportunities and Threats (3 reactions)
What about the opportunities and threats that exist withi...
 
 
 
 
  Ranking model for the Opportunities and Threats (1 reactions)
In order to remove subjectivity in ranking Opportunities and...
 
 
 
 
  Turning Competitor's Weaknesses Into Opportunities (1 reactions)
How can I turn my rival's internal weaknesses into my opp...
 
 
 
 
  SWOT or (maybe better) TOWS? (1 reactions)
While I was teaching Business Policy, I noted the limitation...
 
 
 
 
  Combine SWOT Analysis with 5 Ps
I always do a SWOT analysis against the 5 Ps. People, Produc...
 
 
 
 
  Confrontation Matrix (1 reactions)
I am using the SWOT analysis with my research and find it re...
 
 
 
 
  Design Shool Theory vs. SWOT (1 reactions)
Whats the difference between a SWOT analysis and the ?...
 
 
 
 
  SWOT - research is important (1 reactions)
A swot analysis can only be effectively executed if detai...
 
 
 
 
  SWOC Analysis instead of SWOT Analysis (2 reactions)
The "T" in SWOT can be changed to "C" for Challenge to creat...
 
 
 
 
  Well suited for Crisis too
In this moment of crisis, I never see a better tool for help...
 
 
 
 
  Be Careful with Viewing Industry Opportunities as Company Opportunities (1 reactions)
Managers are advised to guard against considering every indu...
 
 
 
 
  SWOT Analysis or SWOCC Analysis? (10 reactions)
I think SWOT Analysis does not always help analyze the organ...
 
 
 
 
  Swot Analysis Well Suited as First Step
Swot becomes an effective tool for analysing competitiveness...
 
 
 
 
  SWOT Analysis as a Brainstorming Technique (2 reactions)
SWOT analysis can be used in each organization. It can be us...
 
 
 
 
  Using SWOT Analysis for Supplier Audits
This would be a good tool to use during the evaluation of a ...
 
 
 
 
  SWOT and Strategic Marketing Process (1 reactions)
How does the SWOT analysis relate to the strategic marketing...
 
 
 
 
  Internal and External Factors in SWOT Analysis (1 reactions)
Does it make sense to classify internal and external Factors...
 
 
 
 
  Competetive Analysis with SWOT (1 reactions)
Is only a SWOT Analysis enough for competitive analysis or s...
 
 
 
 
  Involve Stakeholders in SWOT Analysis (1 reactions)
Usually SWOT analysis is used by middle or higher managers/d...
 
 
 
 
  Divide and Conquer Approach to SWOT (1 reactions)
I recommend that the SWOT analysis be disaggregated into its...
 
 
 
 
  SWOT Analysis + Weightage
SWOT analysis is a basic tool for any marketing manager to d...
 
 
 
 

Best Practices - SWOT Analysis

Here you will find the most valuable ideas.


  SWOT Analysis is Simple and Easy (2 reactions)
As an MBA student, when we started to learn SWOT analysis it...
 
 
 
 
  Be Careful with SWOT Analysis. Issues and Risks of SWOT (28 reactions)
I am not that happy with SWOT Analysis. My issue does not co...
 
 
 
 
  WHEN to do a SWOT Analysis? (7 reactions)
At what stage should an organization develop a SWOT analysis...
 
 
 
 
  Opportunity or Threat? (2 reactions)
There can be considerable debate about what is a threat and ...
 
 
 
 
  Uses of SWOT analysis (8 reactions)
A SWOT analysis is frequently used in an early stage of stra...
 
 
 
 
  SWOT Analysis for British Airways and Ryan Air (2 reactions)
Would anybody be able to suggest some key points to include ...
 
 
 
 
  How to Proceed after the SWOT Analysis to the Strategy? (6 reactions)
What should we do after the SWOT analysis. In other words, d...
 
 
 
 
  Combining SWOT with other Strategy Tools (3 reactions)
It is my experience that the SWOT analysis as a standalone t...
 
 
 
 

Expert Tips - SWOT Analysis

Here you will find high-quality advice from experts.


 

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

Here you will find powerpoint presentations, micro-learning videos and further information sources.


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


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Special Interest Group Leader
Chander Shenoy
Business Consultant

 


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