SWOT Analysis- is a framework used by financial analyst, entrepreneurs, and
management consultants to help understand the internal and external forces that
may create opportunities or risks for an organization.
(Intro and Conclusion Reporter:)
SWOT History: The history of SWOT analysis reflects a shift in the mid-20th
century towards more structured and strategic management practices. From its
early days as SOFT analysis to its establishment as a cornerstone of business
strategy, SWOT has evolved to remain a critical tool for organizations and
individuals seeking to understand their environment and craft effective strategies.
Albert S. Humphrey, a business and management consultant at the Stanford
Research Institute (SRI), is often credited with developing the framework that
eventually became SWOT. Humphrey led a research project in the 1960s that
focused on why corporate planning systems were failing. His goal was to develop a
tool that organizations could use to evaluate their strategic positioning and develop
better business plans.
(Reporter: )
SWOT Stands for:
Strengths, Weaknesses, Opportunities, and Threats with strengths and weaknesses
being internal factors, and opportunities and threats being external.
Strength- Characteristics that give the business a competitive advantage over
others. These are internal factors that give the business or project an advantage
over others.
-Competitive Advantages: Unique attributes or benefits that set the organization
apart.
-Capabilities: Skills, technologies, or resources that are better than competitors.
-Strong Brand Recognition: A well-known and respected brand in the market.
-Financial Health: Access to capital, good cash flow, or profitability.
Skilled Workforce: Employees with a high level of expertise or industry
experience.
-Customer Loyalty: A strong base of repeat customers.
Examples of Strengths:
-A unique product that is hard to replicate.
-A strong distribution network.
-Patented technology or processes.
(Strength reporter:)
Weaknesses- Characteristics that give the business a disadvantage relative to its
competitors. These are areas that need improvement or vulnerabilities that could
hinder success.
-Areas of Improvement: Limitations or areas where the company lacks efficiency.
-High Operational Costs: Excessive expenses that reduce profitability.
-Limited Market Reach: Small customer base or limited geographical presence.
-Weak Online Presence: Poor digital marketing strategies or lack of e-commerce.
-Skill Gaps: Lack of expertise or resources in key areas.
-Outdated Technology: Systems or equipment that hinder productivity.
Examples of Weaknesses:
-Poor brand recognition in key markets.
-Dependence on a single revenue source.
-Low employee morale or high turnover rates.
(Weaknesses Reporter:)
Opportunities- Elements in the external environment that allow it to formulate &
implement growth strategies. These factors provide potential for expansion or
innovation.
-Market Growth: Expanding markets or untapped customer segments.
-Technological Advances: New technologies that can enhance efficiency or create
new products.
-Regulatory Changes: Legislation or policies that create favorable conditions.
-Strategic Partnerships: Potential alliances or collaborations to enhance business.
-Consumer Trends: Shifting preferences that align with the company’s offerings.
Examples of Opportunities:
-Expanding into international markets.
-Developing new products or services in response to changing customer demands.
-Taking advantage of digital marketing platforms to grow online sales.
(Opportunities Reporter:)
Threats- Elements in the external environment that can endanger the business and
its ability to operate. These could be challenges that the organization must address
or mitigate.
-Competition: Emerging competitors or intense rivalry in the market.
-Economic Downturns: Recessions or financial crises that affect consumer
spending.
-Technological Disruption: New technologies that make current offerings
obsolete.
-Regulatory Changes: New laws or policies that create additional costs or
restrictions.
-Supply Chain Disruptions: Issues with suppliers or logistical problems that slow
down production.
Examples of Threats:
-A new competitor entering the market with a lower-cost product.
-Changing consumer preferences leading to a decline in demand.
-Regulatory changes imposing new compliance costs.
(Threats Reporter:)
Conclusion:
A SWOT analysis provides a balanced view of the internal and external factors
affecting an organization, helping decision-makers devise strategies that capitalize
on strengths and opportunities while addressing weaknesses and protecting against
threats. It serves as a foundation for strategic planning, innovation, and competitive
positioning.
