SWOT analysis

Rick De Vlieger
13 Mar 2013 | 7 mins read

The SWOT analysis is one of the Management models that is included in the standard package of every Marketing course. SWOT stands for:

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

You can use the SWOT analysis in many different ways. Examples of SWOT analysis:

  • Company - analyze the entire business operation compared to competitors
  • Department - make an analysis against other departments or competitors
  • Service - analyze your service in relation to competitors
  • Product - analyze your product in relation to competitors
  • Personal - analyze your own (professional) behavior towards others

SWOT analysis example

Below each component is described and we give a number of examples per component of what you could put here. We also show how you can ultimately determine strategy from the SWOT analysis. Many managers choose to first create a confrontatiematrix before they convert the SWOT analysis into policy.

Example Strengths within a SWOT analysis

The first S of SWOT stands for Strengths. Describe the strengths of the company, product or service. It is important to remember that these are internal strengths. You will, therefore, see where your strengths lie in relation to your competitors. A SWOT analysis example of strengths could be:

  • Patented innovations
  • A very strong sales department
  • Superior operations

Create a strategy based on strengths in SWOT analysis

Choose the most important three to five from all the strengths that you have identified, and include them in your SWOT analysis. You will determine the strategy from the SWOT. The strategy with regard to your strengths must be aimed at maintaining these unique properties or taking full advantage of them. An example of a measure that you could take from the examples above is to lower the selling price. It may be possible due to superior operations. Thanks to the strong sales department, it is possible that even more market share can be gained.

Example Weaknesses within a SWOT analysis

The W in SWOT stands for Weaknesses. This section deals with internal weaknesses compared to the competition. For example, weaknesses could be:

  • High turnover of staff
  • Technical backlog
  • Low customer satisfaction
  • Poor accessibility

Creating strategy from weaknesses

After you have identified the most important three to five weaknesses in your SWOT analysis, you should devise measures that will improve these internal weaknesses. If you have a high turnover of staff, it could be part of the strategy that you invest in your HR policy.

Examples of Opportunities in a SWOT analysis

The O in SWOT stands for opportunities. In this section you state the most important external opportunities for the company, department, service or product that you are analyzing. Examples of opportunities that you could include in your SWOT analysis are:

  • Expanding economy
  • New technological developments that tie in with the activities of the company
  • New subsidies
  • The competition is struggling

SWOT analysis explanation

Creating strategy based on opportunities

Ultimately, you choose the three to five most important opportunities and include them in your SWOT analysis. Although they are of course external influences that you cannot influence yourself, you can take actions to capitalize on the external opportunities. For example, if there are new technical developments, you could include in your strategy that you want to start a separate business unit to respond to this.

Examples of Threats in a SWOT analysis

The last T in SWOT stands for Treats. In this section you deal with the external threats that the company, department, service or product may encounter. Examples of external threats in a SWOT analysis are, for example:

  • A shrinking economy
  • New entrants in the market (for example from abroad)
  • Changing legislation
  • Rising raw material prices

Creating strategy from Threats

In the end, you choose the most important three to five threats. In the strategy that you are going to put down, you will come up with actions that ensure that the threats identified here are eliminated as much as possible. With a shrinking economy, for example, it could be part of the strategy that you cut costs or enter a new market to prevent shrinkage.

SWOT analysis in four questions


Opportunities:

What are the 5 biggest external opportunities for my company?


Threats:

What are the 5 biggest external threats for my company?


Strengths:
What are the 5 strongest points of my company?


Weaknesses:

What are the 5 weakest points of my company?

Create a confrontation matrix

After you have made the SWOT analysis, you can go one step further and compare the results in a confrontation matrix. In the confrontation matrix, you will compare the internal issues (the strengths and weaknesses) with the external issues (the opportunities and threats). In the confrontation matrix you will actually answer the following four questions:

  • Which strengths of my company and opportunities in the market give me the greatest advantage?
  • Which internal weaknesses should we eliminate to ensure that no important external opportunities are missed?
  • What is the most important external threat and can we use our internal strengths to cope with this threat?
  • Can we eliminate our weaknesses to prevent external threats from becoming a reality?

The confrontation matrix is a fairly comprehensive method. That is why we have chosen to devote a separate article on it. Here you can read more about the confrontation matrix.

Preparing for a SWOT analysis

You can use various other management models to prepare for the SWOT analysis. For a good external analysis you can, for example, use the Five Forces model by Michael Porter or the DESTEP analysis. You can put the conclusions of your external analysis in your opportunities and threats of your SWOT analysis. A good model that you can use to make an internal analysis is, for example, Michael Porter's Value chain or the McKinsey 7S model. You put the most important conclusions in the strengths and weaknesses of your SWOT analysis.

Another method for achieving a good SWOT analysis is through brainstorming. Form a focus group with, for example, the most important stakeholders and write down as many points as possible for all four parts of the SWOT analysis. Finally, make a choice of what the 3 to 5 most important points per part are and include them in the SWOT.

Article rating: 3.5 (65 reviews)
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