SWOT ANALYSIS
It is a managerial tool used to assess the environment. It is used to gather
important information which is then used in strategic planning.
A tool that can help you to analyze what your company does best now, and to
devise a successful strategy for the future
A SWOT analysis examines both internal and external factors – that is, what's
going on inside and outside your organization.
STRENGTH -- These are the positive attributes or resources that a company or
project possesses. They give you an advantage over others.
Examples: a strong brand reputation, skilled workforce, or unique technology.
WEAKNESSES -- These are the negative aspects that put a company or project at a
disadvantage. They are areas where improvement is needed.
Examples: outdated technology, high employee turnover, or poor customer service.
OPPORTUNITIES -- These are favorable external factors that a company or project
can potentially exploit to its advantage.
Examples: emerging markets, changing consumer preferences, or new technologies,
and the external factors such as government policies, climate, and trends.
THREATS -- These are unfavorable external factors that could negatively impact a
company or project.
Examples: increased competition, economic downturns, or new regulations.
HOW TO CONDUCT SWOT ANALYSIS:
Be realistic about the strengths and weaknesses of your business when conducting
SWOT Analysis.
SWOT Analysis should distinguish between where your business is today, and
where it can be in the future.
SWOT Analysis should always be specific. Avoid any gray areas.
Always apply SWOT Analysis in relation to your competition, i.e. better than or
worse than your competition.
Keep your SWOT Analysis short and simple. Avoid complexity and over analysis.
SWOT Analysis is subjective.
OPPORTUNITIES are positive external conditions that a company can capitalize on to improve its
performance or gain a competitive advantage.
Examples:
o Market trends: Growing demand for a specific product or service, or a shift
in consumer preferences.
o Technological advancements: Adopting new technologies that can improve
efficiency or create new products.
o Economic conditions: Favorable government policies, increased purchasing
power, or reduced trade barriers.
o Competitor weaknesses: Identifying vulnerabilities in competitors' strategies
or operations that can be exploited.
o New market segments: Reaching new customer groups or entering
previously untapped markets.
THREATS -- These are external conditions outside the company's control that can pose risks
or challenges to achieving objectives. They are often identified during a SWOT analysis as a
key component to consider.
Examples of these fa ctors include:
Economic conditions:
Recessions, inflation, fluctuating interest rates, and changes in consumer spending can
all negatively affect a company's performance.
Competition:
Increased competition from rivals, new market entrants, or disruptive technologies can
erode market share and profitability.
Government regulations and policies:
Changes in laws, taxes, or trade agreements can create uncertainty and increase
compliance costs.
Social trends:
Shifts in consumer preferences, demographics, or cultural values can make existing
products or services less desirable.
Technological advancements:
New technologies can disrupt existing industries, rendering products or services
obsolete.
Environmental factors:
Climate change, natural disasters, and resource scarcity can impact supply chains and
operations.
Political instability:
Political unrest, conflicts, or changes in government can create uncertainty and disrupt
business activities.
Global factors:
Economic downturns in other countries, trade wars, or pandemics can have ripple
effects on businesses.
Legal issues:
New laws or regulations can create compliance challenges and potential legal risks.
