SWOT ANALYSIS

1. What is SWOT?
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for
identifying both the Opportunities open to you and the Threats you face. Used in a business context,
it helps you to carve a sustainable niche in your market. It is designed to facilitate a realistic, fact-
based, data-driven look at the strengths and weaknesses of an organization, its initiatives, or an
industry. Companies should use it as a guide and not necessarily as a prescription. It is also a great
way to guide business-strategy meetings. It's powerful to have everyone in the room to discuss the
company's core strengths and weaknesses and then move from there to define the opportunities
and threats, and finally to brainstorming ideas.

SWOT stands for:

 Strengths describe what an organization excels at and what separates it from
the competition: a strong brand, loyal customer base, a strong balance sheet,
unique technology, and so on. For example, a hedge fund may have developed a
proprietary trading strategy that returns market-beating results. It must then
decide how to use those results to attract new investors.
 Weaknesses stop an organization from performing at its optimum level. They
are areas where the business needs to improve to remain competitive: a weak
brand, higher-than-average turnover, high levels of debt, an inadequate supply
chain, or lack of capital.
 Opportunities refer to favorable external factors that could give an organization
a competitive advantage. For example, if a country cuts tariffs, a car
manufacturer can export its cars into a new market, increasing sales and market
share.
 Threats refer to factors that have the potential to harm an organization. For
example, a drought is a threat to a wheat-producing company, as it may destroy
or reduce the crop yield. Other common threats include things like rising costs
for materials, increasing competition, tight labor supply and so on.

APPECO – CA
2. What are the rudiments of SWOT?
The rudiments of a SWOT Analysis are
contained:
Strengths:
 What advantages do you have?
 What do you do better than anyone
else?
 What unique or low-cost resources can
you offer?
 What do people in your market see as
your strengths?
 What factors mean that you "get the
sale"?
Weaknesses:
 What could you improve?
 What should you avoid?
 What are people in your market likely
to see as weaknesses?
Opportunities:
 Where are the good opportunities
facing you?
 What are the interesting trends you are
aware of?
Threats:
 What obstacles do you face?
 What is your competition doing that
you should be worried about?
 Are the required specifications for your
job, products or services changing?
 Is changing technology threatening your
position?
 Do you have bad debt or cash-flow
problems?
 Could any of your weaknesses seriously
threaten your business

3. How and when do you use SWOT?

You use SWOT Analysis whenever there is a problem that the business encounters. SWOT
particularly is powerful, with a little thought, it can help you uncover opportunities that you are
well-placed to exploit. And by understanding the weaknesses of your business, you can manage and
eliminate threats that would otherwise catch you unawares.
Here’s how to do SWOT Analysis:
a. Determine the objective
b. Create a grid
c. Label each box
d. Add strengths and weaknesses
e. Draw conclusions.

APPECO – CA