writerpax.blogg.se

The best way to asses the external factors is by using PESTEL analysis for the macro-environment and Porter’s Five Forces for the industry dynamics. To assess the opportunities, a company should look for elements in the environment that could be exploited to its own advantage. Opportunities are the external factors of the SWOT analysis that may affect a company’s performance positively. Together, the strengths and weaknesses form the internal side of the organization and the SWOT analysis. Think about sending out customer surveys and organizing monthly employee gatherings. Weaknesses are best discovered by having enough feedback loops in place, both internally and externally. Weaknesses could for example be a lack of patent protection, poor reputation among customers, a small working capital, bad leadership and an inefficient production process. In other words: they are harmful to a company. These weaknesses are company characteristics that place a company at a disadvantage relative to others. Similarly, these tools are very helpful in assessing a company’s weaknesses. By mapping out a company’s complete value chain, from the purchasing of raw materials to the marketing and sales of the end-products, management is better able to see where true value is created. Another way of assessing where a company’s strengths are coming from is by doing a Value Chain Analysis. Examples of valuable company resources are patents, a strong brand reputation, a new innovative product, a talented workforce, historically developed know-how and large financial reserves. The VRIO framework is a useful tool to evaluate a company’s resources. The source of these strengths are resources and capabilities that are valuable, rare, hard-to-imitate and organization-wide supported.

Sometimes these strengths are also referred to as unique selling points (USPs), firm-specific advantages (FSAs) or competitive advantage. This article will cover each of these four quadrants of the SWOT analysis and will help you choosing the right tools to assess the most important factors that may affect your business.įigure 1: SWOT Analysis Strengths ( SWOT Analysis)Ī company’s strengths are its charactersitics that give it an advantage over others (competitors). By combining these two dimensions one can draw a 2×2-matrix consisting of four quadrants: Strengths, Weaknesses, Opportunities and Threats. Furthermore, these factors may either be favourable/helpful or unfavourable/harmful to a company. These factors may either be internal to a company or external. SWOT Analysis (also known as SWOT Matrix) is a business framework that helps assessing a wide variety of factors that may have a profound impact on a business’s performance.