SWOT Analysis

What is SWOT Analysis?

  • SWOT Analysis helps a business assess its competitive strength and the nature of its external environment

SWOT Analysis Overview:

  • Strengths and Weaknesses are Internal to the Business

  • Opportunities and Threats are External to the Business

What factors are used to assess Strengths and Weaknesses?

  • Competitive Advantages

  • Role for Benchmarking

  • Key Performance Indicators

Likely Evidence of Strengths and Weaknesses:

  • Market share (%)

  • Profitability (operating profit %)

  • Efficiency (unit costs)

  • Brand recognition and loyalty

  • Market capitalism (value and growth)

  • Reputation for quality

Evaluating Strengths and Weaknesses:

  • It is important to focus only the most important

  • Is the judgement made reliable (independent)?

  • How sustainable are the strengths?

  • Can weaknesses be overcome? How?

What should be used to analyse Opportunities and Threats?

  • Political

  • Economic

  • Social

  • Technical

  • Legal

  • Environment

What factors are used to assess Opportunities and Threats?

  • How to take advantage of opportunities

  • How to protect against threats

  • Role of risk management and contingency planning

How useful is SWOT Analysis?

  • Positive:

    • Logical Structure

    • Focuses on strategic issues

    • Encourages analysis of the external environment

  • Negative:

    • Too often lacks focus

    • Independent?

    • It can quickly become out-of-date