How to do a SWOT Analysis?
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A SWOT analysis is a compiling of strengths,
weaknesses, opportunities, and threats.
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The key objective of a SWOT
analysis is to help to develop a complete awareness of all the
elements involved in making a
business decision.
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The first two categories
are internal.
- Strengths are things that
you excel in.
- Weaknesses are things
that you struggle with.
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The following two categories are external.
- Opportunities are elements that organization could
use to improve
- Threats are elements that have potential to harm your
organization.
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Using both internal and external data, the technique can
direct businesses toward more successful strategies and
away from those that have been or are likely to be less
successful.
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Strengths define what a company excels at and what sets it
apart from the competition. A strong brand, a loyal client
base, a strong balance sheet, unique technologies, and so on
are examples of strengths.
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Strengths
- What is our competitive advantage?
- What resources do we have?
- What products are performing well?
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Weaknesses prevent a company from reaching its full
potential. They are areas that the company must enhance in
order to stay competitive. A weak brand, higher-than-average
turnover, an inadequate supply chain, and so on are examples
of weakness.
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Weaknesses
- Where can we improve?
- What products are underperforming?
- Where do we lack resources?
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External factors that can give a company a competitive
advantage are referred to as Opportunities. For example, if
a country cuts tariffs, a car manufacturer can export its cars
into a new market, increasing sales and market share.
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Opportunities
- What technology can we use to improve operations?
- Can we expand our core operations?
- What new market segments can we explore?
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Threats are factors that have the potential to cause harm to a
business. For example, rising costs for materials, increasing
competition, tight labor supply, and so on.
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Threats
- What new regulations threaten operations?
- What do our competitors do well?
- What consumer trends threaten business?
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A SWOT analysis can benefit you to:
- Work to your strengths
- Shore up or make allowances for your
flaws
- Take advantage of changes in the
marketplace
- Minimize risk by defending against
known threats.
Expert's Comment
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SWOT Analysis can be done for an organization, for processes, and also for
individuals as well.