SWOT is an extremely easy-to-use business analysis tool, through the analysis of strength, weakness, opportunity and threat these four dimensions of specific factors, in order to clarify the company's business strategy, the potential development direction and risk.
The strength refers to the enterprise's own strengths, which is the reason why the company has market competitiveness. For example, the company has a wide range of contacts, flexible organizational structure, or irreplaceable products;
The weakness is the opposite of strength, which reflects the company's own defects and potential deficiencies. In some cases, the brand awareness is not high enough, the market share is not enough, or the lack of corporate culture and so on. These two aspects are called internal factors, because the factors that affect these two dimensions are mainly related to the conditions of the enterprise itself.
The opportunity refers to the positive factors that may create competitive advantage for the company, which is usually related to the overall economic environment and government decision-making. The reduction of tariffs and the rise of consumer demand are all relevant examples.
Compared with opportunities, threats are negative environmental factors that may be detrimental to the development of the company. The common ones may be the successful marketing strategies of competitors and the soaring prices of raw materials. These two dimensions are usually called external factors, mainly because the factors that affect them are basically related to the changes of external environment.
Tips for Successful Application of SWOT Analysis:
The SWOT analysis must have an objective understanding of the company's strengths and weaknesses.
The SWOT analysis must distinguish the current situation and the future of the company.
The SWOT analysis must be comprehensive.
SWOT analysis must be compared with competitors, such as superior or inferior to your competitors.
Keep SWOT analysis concise, avoid complexity and excessive analysis
