SWOT Analysis

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Summary
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.


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Forum about SWOT Analysis.


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. (...)
13
 
Design Shool Theory vs. SWOT
Whats the difference between a SWOT analysis and the Design School Theory? (...)
10
 
1 comments
SWOT - research is important
A swot analysis can only be effectively executed if detailed and proper research work has been carried out. With detaile (...)
9
 
1 comments
SWOT Analysis Well Suited as First Step
Swot is an effective tool for analyzing competitiveness only when it is used as first step. Other frameworks such as Por (...)
9
 
1 comments
SWOC Analysis instead of SWOT Analysis
The "T" in SWOT can be changed to "C" for Challenge to create a more positive attitude. (...)
9
 
2 comments
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 necessar (...)
8
 
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 wi (...)
7
 
1 comments
SWOT Analysis or SWOCC Analysis?
I think SWOT Analysis does not always help analyze the organization. For example, the letter 'T" which stands for 'Threa (...)
7
 
10 comments
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 (...)
6
 
2 comments
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 woul (...)
4
 
Internal and External Factors in SWOT Analysis
Does it make sense to classify internal and external Factors? In practice, such distinctions are difficult. An arbitrary (...)
4
 
1 comments
SWOT and Strategic Marketing Process
How does the SWOT analysis relate to the strategic marketing process (SMP)? (...)
3
 
1 comments
Competetive Analysis with SWOT
Is only a SWOT Analysis enough for competitive analysis or should it be combined with other techniques? (...)
2
 
1 comments
SWOT Analysis + Weightage
SWOT analysis is a basic tool for any marketing manager to determine their future strategies. But just listing the stren (...)
2
 
Divide and Conquer Approach to SWOT
I recommend that the SWOT analysis be disaggregated into its 4 parts and distributed to different people for undivided f (...)
2
 
1 comments
Involve Stakeholders in SWOT Analysis
Usually SWOT analysis is used by middle or higher managers/decision makers who are responsible for strategic planning. B (...)
2
 
1 comments
🔥 NEW Evaluation and Giving Weights to Internal Factors
Response factors to listed strengths and weaknesses of a firm identified by an internal audit are typically to be rated (...)
1
 

 

Best Practices

The top-rated topics about SWOT Analysis. Here you will find the most valuable ideas and practical suggestions.


SWOT Analysis is Simple and Easy
As an MBA student, when we started to learn SWOT analysis it was difficult for us to understand, but once I found that i (...)
51
 
2 comments

Be Careful with SWOT Analysis. Issues and Risks 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 (...)
36
 
28 comments

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 (...)
33
 
1 comments

WHEN to do a SWOT Analysis?
At what stage should an organization develop a SWOT analysis?
At the inception or developing stage? (...)
33
 
7 comments

SWOT - Absolutely essential
This is the most important tool companies around the globe will need to survive and grow in our current uncertain econom (...)
32
 
2 comments

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 a (...)
29
 
2 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 ear (...)
26
 
2 comments

Uses of SWOT analysis
A SWOT analysis is frequently used in an early stage of strategic or marketing planning for decision-making, problem sol (...)
21
 
8 comments

SWOT Analysis Strength
I think companies strategies on which company is working and that is giving positive response from a long time is its st (...)
19
 
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 (...)
18
 
3 comments

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 wh (...)
17
 
1 comments

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 intern (...)
16
 
1 comments

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 kee (...)
16
 
2 comments

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 (...)
16
 
1 comments

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? (...)
14
 
7 comments

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 focuse (...)
13
 
3 comments

Expert Tips

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


Steps of Typical SWOT Process

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 (...)

SWOT Strengths and VRIO test

Thoroughly Analyzing Strengths
In order to analyze true, valid strengths in a SWOT Analysis, you can use the VRIO test: VALUE - Does the strength gene (...)

SWOT Dos and Donts

Successful Implementation
- Do create an environment that stimulates active contribution of all members participating in the SWOT analysis. - Do (...)

10 SWOT Golden Rules

SWOT Implementation, SWOT Best Practices
1. Precisely specify all factors to be listed. Avoid gray areas and misinterpretable data. 2. Consider realistically st (...)

SWOT Applications and Aims

SWOT Insight
The SWOT Analysis can be generally carried out on: a product, a brand, a service, a company and its positioning, a distr (...)

Critics on SWOT Analysis

SWOT PItfalls, Improve your Usage of SWOT
Although over the last 40 years SWOT Analysis has been widely used and appreciated as an effective technique for strateg (...)

How to Attribute Scores to All SWOT Factors

SWOT Analysis Implementation
A typical best practice in implementing a SWOT Analysis is to attribute a score to all factors that represent strengths, (...)

SWOT Disadvantages

SWOT in Strategic Planning
Here are the main disadvantages of using a SWOT Analysis for Strategic Planning. - It lacks a detailed structure, typi (...)

SWOT Advantages

SWOT in Strategic Planning
Here following are the main advantages of using a SWOT analysis for Strategic Planning. – SWOT analysis is a flexible (...)

Questions to Analyze the External Environment

External Environment Analysis
When performing a SWOT Analysis, a common practice is to ask the following 7 questions to analyze the external environme (...)

History of SWOT. Early Strategic Planning

Background SWOT Analysis
The origin of the SWOT Analysis has been credited to Albert Humphrey in the 1960s. At that time he was leading a researc (...)
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

Strategic Analysis
Comprehensive presentation about the internal part of strategic analysis. Includes: SWOT, BSC, defining objectives, reco (...)

SWOT Analysis

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

SWOT Analysis with Example

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

SWOT Analysis

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

Techniques for Entrepreneurial Thinking

Entrepreneurship, Critical Thinking, Creative Thinking, Lateral Thinking, Entrepreneurial Thinking
This presentation elaborates on the different types of thinking for successful entrepreneurship. The presentation includ (...)

SWOT, SOFT Diagrams

SWOT, SOFT Analysis
Download and edit this 12manage PowerPoint graphic for limited personal, educational and business use. Republishing in (...)

TOWS Matrix (Heinrich)

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

Research Links

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