Swot Analysis

For any company, SWOT analysis is an important and effective tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. However, SWOT analysis can be very subjective, thus it is better not to rely on it too much.

Normally, strength of an enterprise can be understood as having superior advantages against his competitors. In other words, it is the resource and capability that can be used as a basis for developing a competitive advantage. Strength can be the patents, strong brand names, good reputation among customers, specialist-marketing expertise, a new and innovative product or service, the location of the business, the quality processes and procedures, or any other aspect of the business that adds value to his product or service.

On the contrary, weakness seems to be on the opposite side. The absence of certain strengths may be viewed as a weakness. The weakness of a business can be the lack of marketing expertise, the undifferentiated products or services, the inconvenient location of the business, the poor quality goods or services, or the damaged reputation

In addition, opportunity is regarded as the new chance for the company. It is moving into new market segments, or new international markets that offer improved profits, mergers, joint ventures or strategic alliances, even a market vacated by an ineffective competitor.