SWOT Analysis

SWOT Analysis

The SWOT (Strengths - Weaknesses - Opportunities - Threats) is a tool for strategic analysis of marketing plans of a company. It combines the study of internal and external forces and weaknesses of an organization, territory, sector, etc. The opportunities and threats in its environment to help define a marketing strategy.

The main purpose of a SWOT analysis is to help an organization find its critical strategic factors, for once identified, use them and support organizational changes: consolidating the strengths, minimizing weaknesses, taking advantage of opportunities, and eliminating or reducing threats. The SWOT analysis is based on two pillars: internal analysis and external analysis of an organization. The SWOT analysis is an important tool of strategic management and also the basis of many marketing strategies . It comes from the military sector and to this day as a principle of many (Asian) martial arts . In the 1960s, she was at the Harvard Business School developed for use in business.

The internal appraisal of a firm's strengths and weaknesses involves looking at the firm's current resources: the amount and quality of these resources, how well they are being managed in terms of achieving operating economies and developing core skills, and how the firm's resources match up to the requirements of the Market place as identified by the external appraisal of threats and opportunities. This kind of audit typically reveals a checklist of strengths and weaknesses of the firm as seen by its incumbent management (but their perception could be endorsed or changed by employing the services of an outside team of Management Consultants). For example, the analysis may reveal that the firm is especially strong in Production but that the firm's products have failed to sell well because of poor Marketing. This can then be remedied by upgrading the marketing function with a more careful focus on understanding customer needs.

The appraisal of the firm's external environment involves looking both at the immediate threats and opportunities encountered in the firm's present markets and also at the long-term strategic possibilities open to the firm for developing its business interests in other directions. A typical threat facing a firm in its existing market is loss of business to competitors and to new entrants (due possibly, as in our example above, to the firm's poor marketing), but for firms possessing Competitive Advantage (lower costs, superior products) over rivals, opportunities abound, particularly in expanding markets. The ultimate threat facing firms in an existing market is, of course, the danger of market obsolescence, i.e. the market itself goes into decline as new substitute products emerge. In consequence, careful attention needs to be paid to the identification of opportunities for successful Diversification, where, for example, the firm's core internal skills can be carried over and transferred to new markets (Hill & Westbrook, 1997).

The SWOT analysis is based on two pillars: internal analysis and external analysis of an organization. This paper will also analyze SWOT of three different industries. Below is the SWOT for the industries:

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