What is SWOT analysis.

Essay by lynn_33 March 2005

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SWOT Analysis.

SWOT analysis summarizes the key issues from an analysis of the business environment and the strategic capability of an organization. The main objectives of conducting SWOT analysis is to identify the extent to which the current strategy of an organization and its more specific strength and weaknesses are relevant to, and capable of, dealing with the changes taking place in the business environment. It also uses to assess whether there are opportunities to exploit further the unique resources or core competence of organization. SWOT stands for strengths, weaknesses, opportunities and threats.


Strengths are internal characteristic that has the potential of improving the organization's competitive situation. Every organization has some strength.

A strength could be:

* A new product or service

* New machinery or equipment.

* Strong market share.

* Strong financial.

* Specialist Hardware and Software expertise.


Weaknesses are an internal characteristics that leaves the organization potentially vulnerable to strategic moves by competitors.

Every organization also has some weakness.

A weakness could be:

* Poor reputation.

* Lack of marketing strategies.

* Location of the business in respect of the market-place.

* Poor after-sales service record.


Opportunities are an environment situation that offers significant prospects for improving an organization's situation relative to competitors. All organizations have some opportunities that they can gain from. These could range from diversification to sale of operations.

An opportunity could be:

* A new or developing market.

* Possibility of purchasing an effective competitor.

* Government grants offered for new market development.

The possibility of cheaper raw materials.


Threats are an environment situation that offers significant prospects for undermining an organization's competitive situation. No organization is exceptional to threats. These could be internal, such as falling productivity. Or they could be external, such as lower priced international competition.