Strategic Management

SWOT analysis
It provides an overview of the strategic
situation.
 SWOT
A widely used framework for organizing and using data and information
gained from situation analysis

Encompasses both internal and external environments

One of the most effective tools in the analysis of environmental data

and information
A SWOT analysis generates information that is helpful in matching an
organizations or a groups goals, programs, and capacities to the
social environment in which they operate

It is an instrument within strategic planning

When combined with a dialogue, it is a participatory process

 SWOT
Factors affecting an organization can usually be classified
as:

Internal factors
Strengths (S)
Weaknesses (W) Strengths Weaknesses

External factors
Opportunities (O)
Threats (T) Opportunities Threats
 Strengths
A strength is a resource or capability controlled by or
available to a firm that gives it an advantage relative to
competitors in meeting the needs of the customers it
serves.
Strength arise from the resources and competencies
available to the firm.
Positive tangible and intangible attributes, internal to an
organization.
They are within the organizations control
What advantage do you have that others dont have, like
my special skills, special connections, education etc?
 Weakness
A weakness is a limitation or deficiency in one or
more of a firms resources or capabilities relative to
its competitors that create a disadvantage in
effectively meeting customer needs.
Factors that are within an organizations control that
detract from its ability to attain the core goal.
Which areas might the organization improve?
 Opportunities

External attractive factors that represent the reason

for an organization to exist and develop.
What opportunities exist in the environment, which
will propel the organization?
An opportunity is a chance for firm growth or
progress due to a favorable juncture of
circumstances in the business environment.
 Threats
A threat is a factor in your companys external
environment that poses a danger to its well-being.
Possible Threats:
New entry by competitors
Changing demographics/shifting demand
Emergence of cheaper technologies
Regulatory requirements
Recession
Political instability
Religious battles
Terrorist attack
Social activism
 Implication
By examining opportunities, the organization can
discover untapped markets, and new products or
technologies, or identify potential avenues for
diversification.
By examining threats, the organization can identify
unfavorable market shifts or changes in technology,
and create a defensive posture aimed at preserving
its competitive position.
 Major benefits of SWOT analyses

Simplicity
Flexibility
Integration and synthesis
Collaboration
Lower costs
 For a productive SWOT analysis
Stay focused. Be specific and avoid grey areas. Keep your
swot short and simple. Avoid complexity and over analysis
Collaborate with other functional areas
Examine issues from the customers/ stakeholders
perspective
Look for causes, not characteristics
Separate internal issues from external issues