SWOT analysis

S-W-O-T analysis may have been the idea of Albert Humphrey, who wanted to explain why

Definition of SWOT:

• S = strengths, which give a business an advantage over others.

• W = weaknesses, which give it a disadvantage.

• O = opportunities, which a business could usefully

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  .

• T = threats, which may cause trouble.

Internal factors (strengths and weaknesses):

• Examples include:

• what a firm sells.

• the price of its products or services.

• all the firm’s

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• the firm’s financial situation and output possibilities.

External factors (opportunities and threats):

• These are usually outside a company’s control.

• Understanding them can reduce a company’s exposure to

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• Factors include:

• activities of other businesses.

• changes in society and fashions.

• new

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  that are made.

• what happens in the marketplace.

Uses of SWOT analysis:

• For seeing what’s changing in a particular area.

• For reviewing a business’s strategy every

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• 

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  departments of many companies do a SWOT analysis on their principal competitors.

• SWOT is a useful technique not only for profit-making companies, but also for:

• 

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• projects in the community.

• other non-profit groups.

Advantages of SWOT analysis:

• Conducting a SWOT is

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  , as anyone can do it.

• It improves a person’s understanding of their organisation.

Limitations of SWOT analysis:

• Because an effective analysis is quick, it’s not a very detailed piece of research

• It’s based on subjective judgement, and might not be consistent.

• SWOT fails to take into consideration factors that might be particularly

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  in certain circumstances.