What is SWOT?
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. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.
In SWOT, strengths and weaknesses are internal factors.
For example: strength could be:
1.Specialist marketing expertise.
2.A new, innovative product or service
3.Location of the business
4.Quality processes and procedures
5.Any other aspect of the business that adds value to the product or service.
A weakness could be:
1.Lack of marketing expertise
2.Undifferentiated products or services (i.e. in relation to the competitors)
3.Location of the business
4.Poor quality goods or services
5.Damaged reputation
In SWOT, opportunities and threats are external factors.
For example: An opportunity could be:
1.A developing market such as the Internet.
2.Mergers, joint ventures or strategic alliances
3.Moving into new market segments that offer improved profits
4.A new international market
5.A market vacated by an ineffective competitor
A threat could be:
1.A new competitor in the home market
2.Price wars with competitors
3.A competitor has a new, innovative product or service
4.Competitors have superior access to channels of distribution
5.Taxation is introduced on the product or service
Some features of SWOT Analysis:
oSWOT analysis distinguishes between where the organization is today, and where it could be in the future
oSWOT should always be specific.
oSWOT is applied in relation to competition i.e. better than or worse than the businesses competition
oSWOT is short and simple.
oComplexity and over analysis is avoided,
oSWOT is subjective.