SWOT Analysis
From Entrepedia: The Entrepreneurship Wiki
A Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis is a framework that can be used to evaluate either a company of part of a company. The SWOT framework distinguishes two primary dimensions on which a company should be measured:
Contents |
Internal Dimension
This is concerned with its Assets and Core Competencies and any Relative Strengths and Weaknesses it has relative to other companies that it could compare itself to in general.
External Dimension
Which is concerned with how the business environment it operates in is changing, which affords it opportunities or causes it threats.
Figure 1 SWOT Analysis
SWOT examples
- Strengths can include:
Good cash flow, good reputation or branding, good staff training and experience, efficient operations, prestigious clients, quality product or service, integrity, open communication with client, repeat business and proven track record, etc.
- Weaknesses can include:
Obsolete technology, poor products, ineffective marketing or sales, limited financing, lack of brand awareness nationally, small client base, young company, possible shortfall in resources, etc.
- Opportunities can include:
A gap in the market, a new source of labour, deregulation of a market, expansion, increase in sales/marketing and PR effort, development of client services, development of relationships with other professionals, etc.
- Threats can include:
New technology making the company's product obsolete, market deregulation increasing competition in home markets, higher taxation rates, inability to service a growing market, lack of skilled resources, inability to capture business, breakdown in communications with clients and intermediaries, strong competitors, limited market, etc.
Helpful Tips
- Prepare your SWOT Analysis with fellow directors and advisors. It is a much more useful exercise if you complete it with the help of others.
- Make use of the SWOT Analysis, e.g. what strengths do you possess in order to make the most of your opportunities and what are you going to do about your weaknesses?
- Have a good look at the competition. Identify their weaknesses, recognise their strengths. Don't bother to knock them - it's not worth the hassle.
- Continue to use the SWOT Analysis as your business grows and progresses.
