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What Is SWOT Analysis

A SWOT analysis is a framework used to evaluate a company's internal strengths and weaknesses and external opportunities and threats. It involves specifying an objective and identifying internal factors that are favorable (strengths) and unfavorable (weaknesses) and external factors that are favorable (opportunities) and unfavorable (threats) to achieving that objective. A SWOT analysis is an important part of strategic planning that provides information to develop strategies by matching a firm's resources and capabilities to its competitive environment.

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Parul Rana
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285 views

What Is SWOT Analysis

A SWOT analysis is a framework used to evaluate a company's internal strengths and weaknesses and external opportunities and threats. It involves specifying an objective and identifying internal factors that are favorable (strengths) and unfavorable (weaknesses) and external factors that are favorable (opportunities) and unfavorable (threats) to achieving that objective. A SWOT analysis is an important part of strategic planning that provides information to develop strategies by matching a firm's resources and capabilities to its competitive environment.

Uploaded by

Parul Rana
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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What Is SWOT Analysis?

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a


framework used to evaluate a company's competitive position and to develop
strategic planning. SWOT analysis assesses internal and external factors, as
well as current and future potential.

A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven


look at the strengths and weaknesses of an organization, its initiatives, or an
industry. The organization needs to keep the analysis accurate by avoiding
pre-conceived beliefs or gray areas and instead focusing on real-life contexts.
Companies should use it as a guide and not necessarily as a prescription.

Techniques of SWOT analysis


Published by -admin Category -Planning Techniques

SWOT Analysis
A scan of the internal and external environment is an important part of the
strategic planning process. Environmental factors internal to the firm usually
can be classified as strengths (S) or weaknesses (W), and those external to the
firm can be classified as opportunities (O) or threats (T). Such an analysis of
the strategic environment is referred to as a SWOT analysis. The SWOT
analysis provides information that is helpful in matching the firm’s resources and
capabilities to the competitive environment in which it operates. As such, it is
instrumental in strategy formulation and selection. The following diagram shows
how a SWOT analysis fits into an environmental scan:

SWOT analysis is a strategic planning method used to evaluate the strength,


weakness, opportunities and threats involved in a planning of a city, town or a
ward. It involves specifying the objective of the plan or project and identifying
the external factors that are favourable and unfavourable to achieve that project.

 A SWOT analysis must first start with defining a desired end state or
objective. A SWOT analysis may be incorporated into the strategic
planning model.
 Strength: The characteristics that give an advantage.
 Weakness: The characteristics that give disadvantage.
 Opportunities: External factors that help.
 Threats: External factors that can harm.

SWOT Analysis Framework

Environmental Scan

Internal Analysis External Analysis

Strengths Weaknesses Opportunities Threats

SWOT Matrix

Strengths

A firm’s strengths are its resources and capabilities that can be used as a basis
for developing a competitive advantage. Examples of such strengths include:

 patents
 strong brand names
 good reputation among customers
 cost advantages from proprietary know-how
 exclusive access to high grade natural resources
 favorable access to distribution networks

Weaknesses

The absence of certain strengths may be viewed as a weakness. For example,


each of the following may be considered weaknesses:
 lack of patent protection
 a weak brand name
 poor reputation among customers
 high cost structure
 lack of access to the best natural resources
 lack of access to key distribution channels

In some cases, a weakness may be the flip side of a strength. Take the case in
which a firm has a large amount of manufacturing capacity. While this capacity
may be considered a strength that competitors do not share, it also may be a
considered a weakness if the large investment in manufacturing capacity
prevents the firm from reacting quickly to changes in the strategic environment.

Opportunities

The external environmental analysis may reveal certain new opportunities for
profit and growth. Some examples of such opportunities include:

 an unfulfilled customer need


 arrival of new technologies
 loosening of regulations
 removal of international trade barriers

Threats

Changes in the external environmental also may present threats to the firm.
Some examples of such threats include:

 shifts in consumer tastes away from the firm’s products


 emergence of substitute products
 new regulations
 increased trade barriers

Importance:
SWOT analysis is not only concerned with making only four lists but
it is much more than that.

The following points highlight its importance:


1. SWOT Analysis brings to light whether the business is healthy or
sick.

ADVERTISEMENTS:

2. An undertaking comes to know of both internal as well as


external factors affecting its success or failure.

3. It helps in the formation of a strategy so as to make preparations


for the possible threats from the competitors.

4. SWOT analysis evaluates the business environment in a detailed


manner so as to take strategic decisions for the future course of
action.

→ Advantages of SWOT Analysis to a


business
 SWOT analysis gives an acceptable perspective of your strengths, and
permits you to expand on them to meet your business targets.

 It shows your weaknesses and gives an opportunity to overturn them.


 It provides for you a sneak peak into the opportunities that dwell ahead.
Utilizing this you can draft your vital development arrangements
focused around your weaknesses and strengths.
 It helps you examine conceivable threats to your business, and roll out
essential improvements to the business arrangements and development
plans. Moreover, it encourages making supplementary or optional
plans, emergency arrangements, and so on.
 It helps you utilize a methodology to match your strengths and
opportunities; utilize those methods for changing over your weaknesses
and threats into your strengths and opportunities.
 The whole SWOT analysis methodology brings to light your resources,
and gives inspiration and the essential drive to continue your marketing
strategies in spite of all odds.

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