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 Special Interest Group


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SWOT Analysis Forum  

Recent topics

  SWOT Analysis or SWOCC Analysis?
I think SWOT Analysis does not always help analyze the organization. For example, the letter 'T" which stands for 'Threat' is not applicable to social...
     
 
  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 classification of external fa...
     
 
  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 focus on the one aspect. Each e...
     
 

Best Practices - SWOT Analysis
  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 it is so simple to learn, once ...
     
 
  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 like to make some statements w...
     
 
  WHEN to do a SWOT Analysis?
At what stage should an organization develop a SWOT analysis?
At the inception or developing stage?...
     
 
  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!...
     
 
  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. Opportu...
     
 
  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. ...
     
 



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  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...
     
 
  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 increas...
     
 
  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
"s...
     
 
  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 ...
     
 
  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 ...
     
 
  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 ...
     
 
  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 secr...
     
 
  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 step in developing alternativ...
     
 
  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...
     
 
  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....
     
 
  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 ...
     
 
  Design Shool Theory vs. SWOT
Whats the difference between a SWOT analysis and the Design School Theory?...
     
 
  SWOT - research is important
A swot analysis can only be effectively executed if detailed and proper research work has been carried out. With detailed research you won't be...
     
 
  SWOC Analysis instead of SWOT Analysis
The "T" in SWOT can be changed to "C" for Challenge to create a more positive attitude....
     
 
  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 ...
     
 
  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 ...
     
 
  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, benchm...
     
 
  SWOT Analysis as a Brainstorming Technique
SWOT analysis can be used in each organization. It can be used as brainstorming technique where individuals c...
     
 
  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...
     
 
  SWOT and Strategic Marketing Process
How does the SWOT analysis relate to the strategic marketing process (SMP)?...
     
 
  Competetive Analysis with SWOT
Is only a SWOT Analysis enough for competitive analysis or should it be combined with other techniques?...
     
 
  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 ...
     
 
  SWOT Analysis + Weightage
SWOT analysis is a basic tool for any marketing manager to determine their future strategies. But just listing the strengths, weaknesses, opportunitie...
     
 

Expert Tips - SWOT Analysis
 

Steps of Typical SWOT Process

 
 
 

SWOT Strengths and VRIO test

 
 
 

SWOT Dos and Donts

 
 
 

10 SWOT Golden Rules

 
 
 

SWOT Applications and Aims

 
 
 

Critics on SWOT Analysis

 
 
 

How to Attribute Scores to All SWOT Factors

 
 
 

SWOT Disadvantages

 
 
 

SWOT Advantages

 
 
 

Questions to Analyze the External Environment

 
 
 

History of SWOT. Early Strategic Planning

 
 



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Resources - SWOT Analysis

Internal Analysis

 

SWOT Analysis

 

SWOT Analysis with Example

 

SWOT Analysis

 

Techniques for Entrepreneurial Thinking

 

SWOT, SOFT Diagrams

 

TOWS Matrix (Heinrich)

 
 

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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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