A SWOT analysis (alternatively SWOT matrix) is a structured planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The degree to which the internal environment of the firm matches with the external environment is expressed by the concept of strategic fit. Strategic fit expresses the degree to which an organization is matching its resources and capabilities with the opportunities in the external environment. SWOT analysis is a method for analysing a business, its resources, and its environment. SWOT is commonly used as part of strategic planning and looks at:
- Internal strengths
- Internal weaknesses
- Opportunities in the external environment
- Threats in the external environment
SWOT can help management in a
business discover:
- What the business does better than the competition
- What competitors do better than the business
- Whether the business is making the most of the opportunities available
- How a business should respond to changes in its external environment
The key point to remember about SWOT
is that:
Strengths and weaknesses
- Are internal to the business
- Relate to the present situation
Opportunities and threats
- Are external to the business
- Relate to changes in the environment which will impact the business
·
There is no point producing a SWOT
analysis unless it is actioned! SWOT analysis should be more than a list - it
is an analytical technique to support strategic decisions
·
Strategy should be devised around
strengths and opportunities
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