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Monday, July 23, 2012

SWOT analysis

SWOT Analysis method used to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a project or in a business venture. The technique is credited to Albert Humphrey who led a convention at Stanford University in the year 1960s and 1970s using data from Fortune 500 companies. SWOT Analysis can identify as a powerful technique for understanding strengths and to find Weaknesses. In the same time it is useful to identify the opportunities and Threats that face. We can't say that SWOT analysis is limited to profit seeking organizations. Because it used in decision making situation, when a desired end state has been defined.


 SWOT stands for strengths, weaknesses, opportunities and threats. 


S     = Strengths

W    = Weaknesses

O     = Opportunities

T     = Threats


This helpful to understand an organization's strengths, weaknesses, opportunities and threats. It enables organizations to focus on strengths, minimize weaknesses, address threats and in the same time allows to take the greatest possible advantage of opportunities available.
SWOT analysis can shown as following figure.



In SWOT analysis, We define Strengths and weaknesses as internal factors. Opportunities and threats as external factors. So, it addressed all factors related to the effort both positive and negative. It is an aid for balance and to develop effective strategy.

  • Strengths:

Strengths in the SWOT Analysis are attributes or that are considered to be important to the execution and ultimate success of the project. So it can describe as an attributes of the person or company that are helpful to achieving the objective.

Below are few examples of strengths

  • Good knowledge.
  • Relationship selling
  • Trust
  • History.
  • Service quality
  • Skillful
  • Weaknesses:

Weaknesses can simply define as an attributes of the person or company that are harmful to achieving the objective. Weaknesses prevent the achievement of a successful result to the project. Weaknesses capture the negative aspects internal that detract from the value offer, or place at a competitive disadvantage. The more accurately identify weaknesses, the more valuable the SWOT will be for assessment.

Below are few examples of Weaknesses,

  • Low or no market share.
  • No brand loyalty.
  • Lack of experience.
  • Limited human resources and staff
  • High cost of production
  • Products or service similar to competitors
  • Opportunities:


are external conditions that are helpful to achieving the objective.
Opportunities may be the result of market growth, lifestyle changes, positive market perceptions , resolution of problems associated with current situations while offerring greater value that will create a demand for services.

Below are few examples of Opportunities,

  • A growing market.
  • Increased consumer spending.
  • Selling internationally.
  • Development of new technology
  • Growing trend and customer base
  • Threats: 

Threats can define as an external conditions which could do damage to the objective. Normally threat is a challenge created by an unfavorable trend or development that may lead to deteriorating revenues or profits.

Below are few examples of Threats,

  • Competitors
  • Price increases by suppliers,
  • Governmental regulation,
  • Economic downturns,
  • Devastating media
  • New substitute products emerging


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