SWOT Analysis
A SWOT analysis is an analytical tool that can help analyze a business. "SWOT" stands
for strengths, weaknesses, opportunities, and threats. This type of analysis represents an
effort to examine the interaction between the particular characteristics of your business
and the external marketplace in which you compete.
The internal portion of a SWOT analysis looks at the individual strengths and weaknesses
of your specific business. Similarly, the external analysis looks at the opportunities
presented by the marketplace and the threats that you face in your chosen market.
Strengths
Every organization has some strength. In some cases this is obvious, for example,
dominant market shares. In other cases, it is a matter of perspective, for instance, a
company is very small and hence has the ability to move fast. It is important to note that
companies that are in a bad position also have strengths. Whether these strengths are
adequate is an issue for analysis. A strength could be:
your specialist marketing expertise.
a new, innovative product or service
location of your business
quality processes and procedures
state-of-the-art equipment
any other aspect of your business that adds value to your product or service
Weaknesses
Every organization also has some weakness. In some cases, this is obvious; say for
example, a stricter regulatory environment. In other cases, it is a matter of perspective,
for example, a company has 99% market share and is open to attack from every new
player. It is important to note that companies that are extremely competent in what they
do, also have weaknesses. How badly these weaknesses will affect the company is a
matter of analysis. A weakness could be:
lack of marketing expertise
undifferentiated products and service (i.e. in relation to your competitors)
location of your business
poor quality goods or services
damaged reputation
problems managing inventories
poorly motivated or untrained staff
inefficient or obsolete production methods
Opportunities
All organizations have some opportunities that they can gain from. These could range
from diversification to sale of operations. Identifying hidden opportunities is the mark of
an astute analyst. An opportunity could be:
