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.


Special Interest Group

SWOT Analysis Special Interest Group.



Special Interest Group (1319 members)

Discuss

Forum about SWOT Analysis.


 

Significance of SWOT Analysis. Strengths
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
 
5 comments
🔥 NEW Internal and External Factors in SWOT Analysis
Does it make sense to classify and distinguish internal and external Factors?
In practice, such distinctions are di...
13
 
1 comments
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...
12
 
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...
10
 
2 comments
SWOC Analysis versus SWOT Analysis
The "T" in SWOT can be changed to "C" for Challenge to create a more positive attitude....
9
 
2 comments
SWOT Analysis as a Brainstorming Technique
SWOT analysis can be used in each organization. It can be used as part of the brainstorming technique where individuals ...
8
 
2 comments
Assigning Weights in SWOT Analysis
SWOT analysis is a basic tool for any strategist/marketing manager to determine their future strategies. But just listin...
7
 
1 comments
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
Competitive Analysis with SWOT
Is only a SWOT Analysis enough for competitive analysis or should it be combined with other techniques?...
4
 
2 comments
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...
4
 
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

Best Practices

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


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

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

Opportunity or Threat?
There can be considerable debate about what is a threat and what is an opportunity.
When a company spots a new tren...
26
 
2 comments

Application Areas of SWOT Analysis
A SWOT analysis is frequently used in an early stage of STRATEGIC OR MARKETING PLANNING for decision-making, problem sol...
21
 
7 comments

How to Turn Competitor's Weaknesses Into Opportunities
How can I turn my rival's internal weaknesses into my opportunities?
This is not so easy as some companies succeed ...
19
 
2 comments

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

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...
16
 
3 comments

SWOT or TOWS Matrix?
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
 
8 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 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....

Short SWOT Analysis Introduction and Warnings

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 ...

Research Links

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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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