SWOT analysis
A SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. Strengths and weaknesses are internal to an organization. Opportunities and threats originate from outside the organization. A SWOT analysis, usually performed early in the project development process, helps organizations evaluate the environmental factors and internal situation facing a project. Strengths and weaknesses are attributes that measure your internal capability. Opportunities and threats refer to how the external environment affects your team/business/group. Ideally a cross-functional team or a task force that represents a broad range of perspectives should carry out SWOT analyses. For example, a SWOT team may include an accountant, a salesperson, an executive manager, an engineer, and an ombudsman.
Examples of possible Strengths and Weaknesses - Experience
- Resources
- Originality
- Customer Service
- Efficiency
- Competitive Advantages
- Tools
Examples of possible Opportunities and Threats - Business Alliances
- New Products and/or Services
- Increasing Market Saturation
- Targeting a New Market Segment
- Locating a New Source of Revenue
Many of these factors could appear listed in several categories. For example, if one's competitors initiate an alliance, this comprises a threat. If one becomes part of such an alliance, this could become an opportunity. If an existing alliance causes problems in a supply chain, one diagnoses a weakness. If one's alliances offer a competitive advantage, this indicates a strength. SWOT analysis can help in turning weaknesses and threats into opportunities, and ultimately into strengths. The exercise can also identify opportunities that will address weaknesses, and strengths that will counter threats.
See Alsoenvironmental scanningcompetitor analysisecological model of competitionPEST analysisPorter 5 forces analysisstrategic managementstrategic planningmarketingmarketing management
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References Hill, T. and Westbrook, R. (1997) "SWOT Analysis: It's time for a product recall", Long Range Planning, vol 30, no 1, 1997. This gives a critical assessment of the use of SWOT analysis.
External links Explanation from QuickMBA
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