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SWOT (Strengths, Weaknesses, Opportunities and Threats) is a simple but useful framework for analyzing your organization’s strengths and weaknesses and the opportunities and threats that you face. It helps you focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you.
The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within your organization’s unique value proposition. SWOT analysis groups key pieces of information into two main categories:
SWOT analysis may be used in any decisionmaking situation when an objective has been defined. SWOT should be applied at multiple levels in the business development planning process.
At the enterprise level, use SWOT to help build a strategic plan. SWOT analysis can be used to “kick off” strategy formulation.
An categorizes the changes and forces that affect your company either directly or indirectly through your customers, suppliers and competitors. This type of analysis is usually conducted in the process of preparing a strategic plan, with the goal being to identify threats and opportunities for your business. Some environmental forces include:
An organization’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market.
When looking at your strengths, think about them in relation to your competitors.
Consider weaknesses from both an internal and customer-centric basis: Do other people seem to perceive weaknesses that you don’t see? Are your competitors doing anything better than you? Be realistic now, and face any unpleasant truths as soon as possible.
A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
Don’t overlook external factors, such as new government regulations or technological changes in your industry.