SWOT is the acronym for Strength, Weaknesses, Opportunities and Threats. It is a tool which can be used on both personal and business level. In personal context, the tool allows you to develop and organize a career path which makes the most of your capabilities and talents; whereas in business context, the tool helps to identify your resources and success in a highly competitive environment.
Albert Humphrey is credited for inventing the tool in the decade of sixties. Fortune 500 companies as well as other SME’s still practice SWOT analysis for crafting strategies which assist them in grabbing a competitive position locally as well as globally.
SWOT Matrix or Analysis Template
Strengths
Staff
Customer Base
Market Position
Financial Resources
Sales Channels
Products/Services
Profitability
Growth
Weaknesses
Staff
Competition
Low Profit Margin
Market Position
Lack of Funding
Poor Access to Distribution
Opportunities
Changing Customer Tastes
Liberalization of Markets
Technical Advancements
Low Personal Taxes
New Distribution Channels
Development
Threats
Tax Increases
Reputation
Low Brand Awareness
Core Activates
Gap in Required Skills
Data
SWOT Strengths
Strength refers to those abilities or resources which provide competitive edge. It is on the basis of strengths that an entity enjoys a successful position among competitors. Strengths have to be maintained or improved.
Example of SWOT Strengths
Personal Strength
Qualification, experience, social contacts, confidence, financial status, honesty, intellectualness etc.
Business Strength
Marketing expertise, sufficient financial resources, innovation, business location etc.
SWOT Weaknesses
Weakness refers to those factors which need to be changed or eliminated for the benefit of the individual or business.
Example of SWOT Weaknesses
Personal Weakness
Financial pressure, social limitations, poor character, lack of confidence etc.
Business Weakness
Undifferentiated products and services, bad market reputation, sub standard quality and procedures, poor management etc.
SWOT Opportunities
Opportunities refer to those factors which are good for the individual or company’s success in future. These opportunities need to be captured and optimized.
Example of SWOT Opportunities
Personal Threats
Job openings, scholarships, entrepreneurship opportunities etc.
Business Threats
Brand extensions, new and profitable market segments, joint ventures, alliances, mergers, global expansion etc.
SWOT Threats
Threats are the obstacles which must be minimized, managed or eliminated in order to make the most of opportunities and strengths.
Example of SWOT Threats
Personal Threats
Obsolescence of skills and knowledge, legal proceedings, taxation, inflation etc.
Business Threats
New competitors, taxation, price wars etc.
Core Business Analysis
After carrying out SWOT analysis, individuals and companies realize that strengths and weaknesses come from within whereas opportunities and threats arise from external factors that is the factors under the control of a third person such as government policies, social, demographical and political trends. For this reason, SWOT analysis is also called as internal-external analysis.
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