SEM 2 4 05 PART II SWOT ANALYSIS

SEM 2 4. 05 PART II SWOT ANALYSIS

What is SWOT? � SWOT is an anagram that stands for Strengths, Weaknesses, Opportunities, and Threats.

Strengths, Weaknesses, Opportunities, and Threats � Strength � Any resource or capability your business has that can help you gain a competitive advantage in your industry � Weakness � Any limitation or shortcoming your business has that can keep you from achieving your objectives � Opportunity � Any favorable situation in the environment surrounding your business � Threat � Any unfavorable situation in the environment surrounding your business

BENEFITS Benefits of conducting a SWOT analysis: � Becoming aware of issues that you hadn’t thought of before � Having a “filter” for a great deal of information � Gaining new insights about your business environment by applying SWOT to a competitor’s company

STRENGTHS �Strengths are internal - under your control. ○ What are our advantages? ○ What do well (what is our expertise)? ○ What are our assets? ○ What resources do we have access to? ○ Where are we making money?

STRENGTHS �Examples of strengths: ○ A product or service that you offer that no one else in your area does ○ A convenient location ○ Strong brand recognition ○ The skills and talents of your staff �Once a SWOT analysis identifies an internal strength, a business can use that strength to take advantage of a external opportunity

WEAKNESSES �Weaknesses are internal - under your control. ○ What can we improve? ○ What resources do we lack? ○ Where are we losing money? ○ What are our competitors doing better than we are? �Examples of Weaknesses: ○ Lack of expertise, experience, or management depth ○ Bad reputation among the public ○ Poor communication among staff members ○ Weak brand name

QUESTION �A SWOT analysis indicates that customers' buying preferences are changing, but the business has a very limited product line. This is an example of an external threat attacking an internal weakness

OPPORTUNITIES �Opportunities are external -out of your control. �Collect information about the environment surrounding your business. ○ What are the newest technological breakthroughs? ○ What new needs of customers can we meet? ○ What economic trends are beneficial to us? ○ What niches have our competitors missed?

OPPORTUNITIES �Examples of opportunities: ○ A new software development ○ An improved mechanical process ○ A corporate merger ○ Failure of another company

THREATS �Threats are external - of your control. ○ What obstacles do we face? ○ What is our competition doing? ○ What economic trends are harmful to us? ○ Where are we vulnerable? ○ Do we have money problems? �Examples of threats: ○ New competition moving into your area ○ A new tax that your business owes the government ○ A new law that your business must follow ○ Government regulation ○ A new trend sweeping the public