SWOT Analysis
From Virbus
Contents |
[edit] 1 Summary
SWOT Analysis, is a strategic planning tool used to analysing the internal and external business environment. SWOT analysis gets its name from the four concepts it attempts to analyze- the company’s strengths, weaknesses, opportunities, and threats.
[edit] 2 Why should you use it?
The aim of SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. There are many benefits to using a SWOT analysis in analyzing a company: • A framework for identifying and analyzing strengths, weaknesses, opportunities, and threats.
• An impetus to analyze a situation and develop suitable strategies and tactics.
• A basis for assessing core capabilities and competences.
• The evidence for, and cultural key to, change.
• A stimulus to participation in a group experience.
SWOT analysis is used for business planning, strategic planning, competitor evaluation, marketing, business and product development and research reports.
[edit] 3 Why has it been developed and who developed it?
SWOT analysis came from the research conducted at Stanford Research Institute from 1960-1970. The background to SWOT stemmed from the need to find out why corporate planning failed. The research was funded by the fortune 500 companies to find out what could be done about this failure. The Research Team were Marion Dosher, Dr Otis Benepe, Albert Humphrey, Robert Stewart, Birger Lie.
[edit] 4 When should you use it?
A SWOT analysis should be incorporated into the strategic planning model. If a clear objective has been identified, SWOT analysis can be used to help in the pursuit of that objective.
If the objective seems attainable, the SWOTs are used as inputs to the creative generation of possible strategies, by asking and answering each of the following four questions, many times: • How can we Use each Strength?
• How can we Stop each Weakness
• How can we Exploit each Opportunity?
• How can we Defend against each Threat?
Using a SWOT analysis will allow management to articulate the strengths, weakness, opportunities and threats to the company. With this type of analysis, management can develop plans to create a better market position than its competitors and to gain market share. Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective are to be derived from the SWOTs
[edit] 5 How does it work?
Strengths and weaknesses are both concerned with the internal analysis of the company, while the opportunities and threats are concerned with the external forces affecting the company. When attempting to analyze each of these areas, management should ask itself questions similar to the ones below. As the executives brainstorm in each of the areas, they will expand the list to fit their circumstances and drill down to the level of detail needed to accomplish a complete analysis. Examples of questions for each area include:
As management develops its list of strengths, weaknesses, opportunities, and threats, they need to remember that for every positive attribute of the company there is a negative attribute. In contrast, every negative attribute has a positive attribute for the company. For example, if a company has the strength of having no competition it also has the threat of new competitors entering the marketplace.
[edit] 6 Related topics/tools
• PEST analysis
• SLEPT analysis
• Strategic management
[edit] 7 links/sources
• Free SWOT analysis template worksheet version in MSWord. [1].
• Mard, Michael J. (2005) Driving Your Company's Value : Strategic Benchmarking for Value. Hoboken, NJ, USA: John Wiley & Sons, Incorporated.