SWOT analysis is a method for analysing a business, its resources and its environment. It focuses on the internal strengths and weaknesses of a business (compared with competitors) and the key external opportunities and threats for the business.
SWOT is commonly used as part of strategic planning and looks at:
SWOT analysis aims to discover:
The result of the analysis is a matrix of positive and negative factors for management to address:
The key point to remember about SWOT is that:
Strengths and weaknesses
Opportunities and threats
Using SWOT analysis
There is no point producing a SWOT analysis unless it is actioned! SWOT analysis should be more than a list - it is an analytical technique to support strategic decisions
Strategy should be devised around strengths and opportunities
The key words are match and convert:
A key challenge for any business is to convert weaknesses into strengths. For example:
|Outdated technology||Acquire competitor with leading technology|
|Skills gap||Invest in training & more effective recruitment|
|Overdependence on a single product||Diversify the product portfolio by entering new markets|
|Poor quality||Invest in quality assurance|
|High fixed costs||Examine potential for outsourcing or offshoring|
Don’t forget that for every perceived threat, the same change presents an opportunity for business.
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