S.W.O.T (stands for Strengths, weaknesses, opportunities, threats) analysis is a business strategy tool that helps determining the options offered in a certain area of activity. It’s a very practical and useful tool during the strategic diagnostic phase. It has the advantage of summarizing the strengths and weaknesses of a company as well as the opportunities and threats generated by its environment.
There are two axes of S.W.O.T analysis:
Internal axis: an internal diagnosis that identifies actual characteristics of th business and represents them as Strengths and weaknesses
. Strengths: the business’s critical success factors and aspects that give it a competitive advantage.
. Weaknesses: internal factores that put the business in a disadvantage to its competitors.
External axis: an external diagnosis that lists external factors that may impact the business’s performance, and classify them into opportunities and threats.
. Opportunities: identify the available opportunities for the business in the market. Pinpoint openings in the marketplace and take advantage of them.
. Threats: external factors that may hinder the growth of the company, like: market fluctuations, government restrictions, public perception… etc
This analysis can be applied to the business as a whole, or to each department separately.
One of the departments that rely a lot on this s.w.o.t method is marketing.
While developing a marketing strategy, the data provided by this analysis is extremely important and cannot be overlooked.
The importance of S.W.O.T analysis in marketing:
. Gives a realistic view of the market and help the business get visibility on the current status and determine their position in the market compared to their competitors.
. It provides useful data about the business’s strengths that can help them penetrate the market and meet business targets
. Provides information that the company needs to be aware of its weaknesses and potential areas of improvement, and anticipate future problems.
. Keep track of the company’s performance and permanently adapt to the changing market conditions.
. S.W.O.T analysis helps the business to be proactive, remain competitive and maintain momentum by providing important data to take the right actions I the right moments.
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