SWOT Analysis

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