THE SWOT ANALYSIS

SWOT ANALYSIS

 Created in the 1960s by business gurus

1. Edmund P. Learned
2. Roland Christensen
3. Kenneth Andrews
4. William D. Book
- in their book , Business Policy, Text and Cases
SWOT

 Which stands for Strengths, Weaknesses, Opportunities and Threats

 An analytical framework that can help company meet its challenges and
identify new markets
 It can help identify the business’s risks and rewards.
 Means of identifying the internal and external forces that may affect the
business
INTERNAL FACTORS

1. Financial resources such as money and sources of funds for investment

2. Physical resources, such as company’s location, facilities, machinery and
equipment
3. Human resources consisting of employees
4. Access to natural resources, trademarks, patents, and copyrights
5. Current processes, such as employees programs, department hierarchies
and software systems, sales and distribution
External factors

1. Economic trends including local, national and international

financial trends, developments in the country’s stock market,
reforms in the banking system, growth of the Gross Domestic
Product
2. Market trends, such as new products or technology or evolving
buyer’s profiles, including changes in tastes and lifestyle behavior;
3. National and local laws and statutes as well as political,
environmental and economic regulations
4. Demographic characteristics of the target
market such as the age, the gender, the culture
of the customers
5. Relationships with suppliers and co-owners
6. Competitive threats
Importance of SWOT analysis

 Is a tool that can help a proponent by enabling him/her to identify

and assess the internal and external forces that can affect the
business
 Can serve as guide for the company to attain success
 Guide to prepare for a new venture, design business strategies,
and identify areas of change and reform
 The business owner can anticipate problems, including possible
solutions and take advantage of identified opportunities
 Owner can maximize its strengths and attempt to cut out its
weaknesses
Table for Swot Analysis
SWOT ANALYSIS TEMPLATE
STRENGTHS
-Government incentives
-Low capital requirements
-Market acceptance
-Experienced leaders
OPPORTUNITIES
-Project may replace imported good
Available in the market
-Will improve employee welfare
-Improved company reputation
WEAKNESSES
-Difficulty of organization
-Costly set-up
-Possible pollution problems
-lack of training of workers
THREATS
-Entry of competitors
-Time consuming production
processes
-Opposition from the president