SWOT Analysis

Definition

SWOT Analysis
An analysis of the internal
strengths and weaknesses of the
business and the external threats
and opportunities
Purpose of SWOT Analysis

To conduct a general and quick

examination of the business’s current
position so it can identify preferred
and likely directions in the future.
Strengths & Weaknesses

 Internal (inside)
 Current resources ~ mgmt of resources,
match demand, match compt
 Strengths = + when compared to compt
 Weakness = - when compared to compt
Opportunities & Threats

 Opportunities are possible future

developments
 Opportunities are possible future benefits
 Threats have the potential to cause
problems
SWOT Diagram

Strengths Weaknesses

Opportunities Threats
Strengths
Things the business and staff do well and which;
 They are effective at
 They are well known for
 They make money
 They generate business & Reputation
 Lead to confidence in the market
 Cause customers to come back for repeat
business
 Cause other businesses to learn from them
Weaknesses

 Things the business does badly, that it is

ineffective at or that it has a poor
reputation for.
 Weaknesses include the factors that
cause losses, hardships, disputes,
grievances and complaints
Opportunities

 The directions the business could

profitably take in future because of its
strengths or because of the elimination of
weaknesses.
 Involves considering the business
environment from the widest and most
creative standpoints
Threats

 Arise from the activities of competitors and

from failing to take opportunities or build
on successes.
 Threats come from complacency, lack of
rigour, falling profits and rising costs.