A SWOT analysis helps find the best match between environmental trends (opportunities and threats) and internal capabilities.
- A strength is a resource or capacity the organisation can use effectively to achieve its objectives.
- A weakness is a limitation, fault, or defect in the organisation that will keep it from achieving its objectives.
- An opportunity is any favourable situation in the organisation's environment. It is usually a trend or change of some kind or an overlooked need that increases demand for a product or service and permits the firm to enhance its position by supplying it.
- A threat is any unfavourable situation in the organisation's environment that is potentially damaging to its strategy. The threat may be a barrier, a constraint, or anything external that might cause problems, damage or injury.
In general, an effective strategy is one that takes advantage of the organisation's opportunities by employing its strengths and wards off threats by avoiding them or by correcting or compensating for weaknesses.
The first part of any SWOT analysis is to collect a set of key facts about the organisation and its environment. This will include facts about the organisation's markets, competition, financial resources, facilities, employees, inventories, marketing and distribution system, R&D;, management, environmental setting (e.g. Technological, political, social, and economic trends), history and reputation.
The second part of a SWOT analysis is to evaluate data to determine whether they constitute strengths, weaknesses, opportunities or threats for the organisation. This may be done independently by the individuals in a group, results being compared afterwards. It is important to note that any given fact may give rise to more than one evaluation, and so to ask - " How may this fact be considered as an opportunity as well as a threat?"; "How may this apparent strength turn out to be a weakness?"; "How does this weakness really represent a strength?" The answers to these and similar questions may give managers new insights into choosing appropriate strategies.
References
- Rowe, Mason, Dickel, Mann, Mockler; "Strategic Management: a methodological approach". 4th Edition, 1994. Addison-Wesley. Reading Mass.
Find us on
FAQs
SWOT stands for: Strength, Weakness, Opportunity, Threat. A SWOT analysis guides you to identify your organization's strengths and weaknesses (S-W), as well as broader opportunities and threats (O-T). Developing a fuller awareness of the situation helps with both strategic planning and decision-making.
What are strengths weaknesses opportunities and threats in a SWOT analysis? ›
A strength is a resource or capacity the organisation can use effectively to achieve its objectives. A weakness is a limitation, fault, or defect in the organisation that will keep it from achieving its objectives. An opportunity is any favourable situation in the organisation's environment.
What are 5 examples of weaknesses in SWOT analysis? ›
Weaknesses
- Weak brand(s)
- Higher-than-average turnover.
- High levels of debt.
- Inadequate supply chain.
- Lack of capital.
- Inefficient systems, tools, processes.
- Poor customer experience, service, reviews.
Examples include competitors, prices of raw materials, and customer shopping trends. A SWOT analysis organizes your top strengths, weaknesses, opportunities, and threats into an organized list and is usually presented in a simple two-by-two grid.
What are 5 examples of threats in SWOT analysis? ›
To help you, here are nine common SWOT analysis threats in business:
- Social perception. With the rise of social media, consumers are increasingly aware of the business practices of the companies they support. ...
- Natural disasters. ...
- Technological changes. ...
- Legislation. ...
- Competition. ...
- Globalization. ...
- Data security. ...
- Rising costs.
Take a Blank Page Approach
- Identify your strengths. Explore your strengths. ...
- Review your weaknesses. At first glance, this is honestly my least favorite part. ...
- Define any opportunities available to you. Now it is time to think about external influences. ...
- Understand your potential threats. ...
- Make an informed decision.
The following are illustrative examples of swot opportunities for a product.
- Changing customer needs.
- Changing customer preferences.
- Competition have weak brand recognition.
- Competitors often out of stock.
- Favorable demographic changes.
- Favorable economic conditions.
- Favorable market conditions.
Why employers ask "What are your strengths and weaknesses?"
| Strengths: | Weaknesses: |
|---|
| Attentive and detail-oriented | Competitive |
| Patient | Disorganized |
| Collaborative | Limited experience in a nonessential task |
| Creative | Not skilled at delegating tasks |
5 more rowsApr 9, 2024
Here are some weaknesses that you might select from for your response:
- Self-critical.
- Insecure.
- Disorganized.
- Prone to procrastination.
- Uncomfortable with public speaking.
- Uncomfortable with delegating tasks.
- Risk-averse.
- Competitive.
Some of the most common weaknesses are: Public speaking, meeting deadlines, delegation, lack of patience, lack of attention to detail, lack of experience with certain software, difficulty giving constructive criticism, trouble saying "no" to extra work, and struggling with confidence.
The basic steps for conducting a SWOT analysis are as follows:
- Put a team together. ...
- Set a goal for your SWOT analysis. ...
- Make a list of strengths, weaknesses, opportunities, and threats. ...
- Refine, organize, and prioritize the ideas in each category. ...
- Create an action plan to address SWOT analysis priorities.
SWOT analysis is a framework for identifying and analyzing an organization's strengths, weaknesses, opportunities and threats. These words make up the SWOT acronym. The primary goal of SWOT analysis is to increase awareness of the factors that go into making a business decision or establishing a business strategy.
What are opportunities and threats? ›
We use the word “opportunity” to describe an upside risk with positive impacts, and “threat” is used for downside risks with negative consequences.
What are the 4 types of threats? ›
Threats can be classified in four categories: direct, indirect, veiled, or conditional.
Which one is an example of threat? ›
Most threats are meant to pressure someone to do something (or not do something) by indicating what the punishment will be if they don't comply. For example, telling your brother that you will tell your parents that he was out past curfew unless he gives you something is a threat (it's also blackmail).
What are examples of weaknesses in a SWOT analysis? ›
Next, focus on weaknesses. These are internal factors that could serve as obstacles to achieving your objectives. Common examples might include a lack of financial resources, high operational costs, or outdated technology.
What are opportunities and threats in a personal SWOT analysis? ›
Opportunities are things like market trends, job openings, personal connections, or any external factors that could help you achieve your personal goals. Threats: Potential threats that could potentially hinder your progress or pose a risk to your goals.
How to fill out a SWOT analysis? ›
The basic steps for conducting a SWOT analysis are as follows:
- Put a team together. ...
- Set a goal for your SWOT analysis. ...
- Make a list of strengths, weaknesses, opportunities, and threats. ...
- Refine, organize, and prioritize the ideas in each category. ...
- Create an action plan to address SWOT analysis priorities.
My weakness is I am a person who overthinks before doing any task because I want to do everything perfectly. My strengths are interacting with people, easily attracted to people with me. Weakness: I trust everyone easily. Strengths: I am a good problem solver, honest, disciplined and I have positive attitude.
What does it mean SWOT? ›
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT analysis is a technique for assessing these four aspects of your business. SWOT Analysis is a tool that can help you to analyze what your company does best now, and to devise a successful strategy for the future.
