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SWOT Analysis by Ekta Verma

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats.

The required first step in SWOT analysis is the definition of the desired end state or objective. The definition of objective must be explicit and approved by all participants in the process. Once the objective has been identified, SWOTs are discovered and listed.

SWOTs are defined precisely as follows:

Strengths are attributes of the organization that are helpful to the achievement of the objective.
Weaknesses are attributes of the organization that are harmful to the achievement of the objective.
Opportunities are external conditions that are helpful to the achievement of the objective.
Threats are external conditions that are harmful to the achievement of the objective.

In SWOT, strength and weakness are internal factors.

A strength could be:

your specialist marketing expertise.
a new, innovative product or service
location of your business
quality processes and procedures
any other aspect of your business that adds value to your product or service.

A weakness could be:

lack of marketing expertise
undifferentiated products or services (i.e. in relation to your competitors)
location of your business
poor quality goods or services
damaged reputation

In SWOT, opportunities and threats are external factors. For example:

An opportunity could be:

a developing market such as the Internet.
mergers, joint ventures or strategic alliances
moving into new market segments that offer improved profits
a new international market
a market vacated by an ineffective competitor

A threat could be:

a new competitor in your home market
price wars with competitors
a competitor has a new, innovative product or service
competitors have superior access to channels of distribution
taxation is introduced on your product or service

Conclusion

It is not simply enough to identify the strengths, weaknesses, opportunities, and threats of a company. In applying the SWOT analysis it is necessary to minimize or avoid both weaknesses and threats. Weaknesses should be looked at in order to convert them into strengths. Likewise, threats should be converted into opportunities. Lastly, strengths and opportunities should be matched to optimize the potential of a firm. Applying SWOT in this fashion can obtain leverage for a company.

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