OBJECTIVE
Concerning a company,
identify the main strengths to maintain, opportunities to exploit, threats to
reduce, and weaknesses to manage.
DESCRIPTION
The SWOT analysis is the consolidation of
internal and external analyses, and it is used for strategy definition, usually
in its first stage, to establish the bases of several strategic actions:
- - External analysis: analysis of the external opportunities and threats resulting from the external environment (PEST, PESTEL); for example, the increasing use of mobile devices can be an opportunity to exploit or the increasing cost of energy can be a potential threat.
- - Internal analysis: internal strengths and weaknesses resulting from the internal analysis (MOST, resource audit, etc.) and from competitive analysis (competitive map, importance–performance matrix). For example, a well-known brand is a strength and a poor company strategy definition is a weakness.
SWOT
Analysis
From this matrix the
analyst can define strategic actions that exploit existing opportunities, using
the company’s strengths as critical success factors and reducing the risks that
can be provoked by potential threats and the company’s weaknesses. Since this
is a consolidation of several other analyses, the sources of data depend on
previous analyses and on several gathering techniques, such as brainstorming, the
Delphi method, and surveys. The consolidation process can be performed directly
by the analyst, but it is usually a good practice to consolidate the results or
submit the analysis to other company members, for example through workshops or
think tanks.
TEMPLATE
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