What is SWOT
SWOT stands for: strength, weakness, opportunities and threats.
- Internal: Strength / Weakness
- External: Opportunities / Threats
- Positive: Strength / Opportunities
- Negative: Weakness / Threat
Is something a strength or not? If you produce high-quality goods but at the same time your competitors are producing high-quality goods as well then you cannot classify that as a strength. It becomes more of a necessity rather than strength as it is not giving you the upper hand against your rivals.
While making the SWOT analysis, you tend to note down these factors and try to come up with a business strategy that focuses less on these things. In other words, you try to minimize the usage of such factors. A key part of analyzing the weakness is to come up with ideas which will not only improve your weaknesses but also match up with the competitors.
External forces are such that are beyond your control. However, opportunities are the positive external factors.
Threats are basically the factors which may put your marketing strategy in jeopardy. Not only that, but your entire business is also at risk as well. A key part of SWOT analysis is the assessments of the possible threats that may arise. Since it is an external factor, you have no control over it. However, you can make a contingency plan to combat such risks.
A major part of SWOT analysis is how you implement your strategy based on the data you have received. Listing down all the strengths and weakness, while identifying all the opportunities and threats are of no use if you cannot implement a strategy. In other words, you need to react to the set of information given. You have to utilize the strengths of the firm and take full advantage of the opportunities that open up. Minimizing the weaknesses is also a key factor. You need to come up with ways to either improve on your weaknesses or eliminate them altogether. This combined with avoiding threats or combating those threats will ensure that the business will only provide fruitful results. The true value of SWOT analysis is to bring all these information together. The analysis helps to assess the most promising situations and the most vital issues.