Analysis (Environmental Trends Analysis) Political, Economic, Social, Technological, Environmental, Legal
To analyze the external environment and generate ideas where are the opportunities and threats.
- Economic (government spending)
- Social (health)
- Legal (new regulations, good or bad)
What SWOT Analysis? SWOT allows you to look at the interactions between the INTERNAL factors of Strengths and Weaknesses and factors of Opportunities and Threats to develop action plans.
SWOT is an abbreviation for: S – Strengths W – Weaknesses O – Opportunities T – Threats
Internal Environment (firm)
External Environment (industry- environment)
Strength
Any existing or potential resources or capability within the organization that provides a competitive advantage in the market. Example: Strong distribution network Intense Staff commitment and loyalty Increasing profit margin good management team Activity #1 : Can you identify some of your business idea strengths? Weakness
Any existing or potential force which could serve as a barrier to maintaining or achieving a competitive advantage in the market. Example: Lack of a clear company strategy Lack of training opportunities for using a new software Activity #2: Can you think of some of your business idea weaknesses?
Opportunity
Any existing or potential force in the external environment that, if properly controlled, could provide a competitive advantage. Example: Organization’s geographic location New technology ? New environmental trends.
Activity #3: Can you think of some opportunities available to your business idea? Any existing or potential force in the external environment that could erode a competitive advantage. Example: A new competitor entrant A recession, rising interest rates Activity #4: Can you think of some threats to your business idea? The goal of SWOT Analysis. Take advantage of strengths and opportunities. Minimize weaknesses and eliminate threats Needs SOOT Analysis?
A Government
A Company (existing or startup)
A Department/Business Unit Analyze anything, including yourself to do SWOT Analysis?
Analyses Internal ; External Environment
Perform SOOT Analysis and Document – prepare Action Plans SOOT analysis is useful only when action plans and strategies are developed from the results
Brainstorming – key ingredient for SWOT
SWOT analysis will be useful if: You are thinking outside the box
Availability of varied perspectives – group discussion
Liberty to say your mind
Willingness to break away from traditional methods
Appetite for change
