SWOT Analysis has recently become a mainstay in my life. I’ve been in various classes with group projects where we are required to put together a SWOT analysis before progressing into the project.
So what is a SWOT Analysis?
By basic definition a SWOT analysis via the Business Dictionary is “an evaluation of Situation analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy. SWOT stands for strengths, weaknesses, opportunities, and threats.”
In doing a SWOT analysis, an overview of the company quickly becomes apparent.
Strengths show the aspects of the company that are particularly good. Generally one company’s strength is another company’s weakness within the same industry.
Weaknesses are areas where there is room for improvement. All companies have weaknesses in one form or another, even if it is that they are too good at what they do and are a one-stop shop for their consumers.
Opportunities are the circumstances unique to the company or industry that provide room for expansion. Opportunities can arise from within the company, competitors, resources, and a variety of other factors.
Threats are factors or competitors that could be potentially harmful to the company. Threats can come from a variety of sources, but are generally monitored closely to prevent any damage to the company.
SWOT Analyses generally include stakeholder analysis, or the view that individuals will have on the company’s proposed or current actions. An overall industry analysis can also be very helpful, to know what the rest of the industry is facing.
I see SWOT Analysis as a great starting point whenever companies are needing an evaluation, or wanting to make adjustments. SWOT Analysis provides a great general overview, and is a timeless business tool.