The Environmental Analysis (SWOT analysis)SWOT is a planning tool that identifies the Strengths, Weakness, Opportunities and Threats of an organization. It is created by Albert Humphrey, an American business and management consultant who specialized in organizational management and cultural change.? Specifically, SWOT is a basic, straightforward model and technique that assesses what an organization can and cannot do as well as its potential opportunities and threats.
A SWOT analysis guides to identify the positives and negatives inside the organization and outside of it, in the external environment. The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve desired results. Strengths describe the positive attributes, tangible and intangible, internal to the organization. They are within your control. It has to be considered form both an internal perspective, either from the view of the customers and people in your market. Strengths capture the positive aspects internal to your business that add value or offer you a competitive advantage.
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This is your opportunity to remind yourself of the value existing within your business. Strengths can be evaluated by area, such as marketing, finance, manufacturing and organizational structure. Strengths include the positive attributes of the people involved in the business, including their knowledge, backgrounds, education, credentials, contacts, reputations, or the skills they bring. Strengths also include tangible assets such as available capital, equipment, credit, established customers, existing channels of distribution, copyrighted materials, patents, information and processing systems, and other valuable resources within the business.
Weaknesses are factors that are within your control that detract from your ability to obtain or maintain a competitive edge. It might include lack of expertise, limited resources, lack of access to skills or technology, inferior service offerings, or the poor location of your business. These are factors that are under your control, but for a variety of reasons, are in need of improvement to effectively accomplish your marketing objectives. Weaknesses capture the negative aspects internal to your business that detract from the value you offer, or place you at a competitive disadvantage. These are areas you need to enhance in order to compete with your best competitor. The more accurately you identify your weaknesses, the more valuable the SWOT will be for your assessment.
Opportunities assess the external attractive factors that represent the reason for your business to exist and prosper which are external to your business. These opportunities reflect the potential you can realize through implementing your marketing strategies. Opportunities may be the result of market growth, lifestyle changes, resolution of problems associated with current situations, positive market perceptions about your business, or the ability to offer greater value that will create a demand for your services. However if you have identified ???opportunities??? that are internal to the organization and within your control, you will want to classify them as strengths.Threats are potential threats to a business. Threats include factors beyond your control that could place your marketing strategy, or the business itself, at risk.
These are also external ??“ you have no control over them, but you may benefit by having contingency plans to address them if they should occur. A threat is a challenge created by an unfavorable trend or development that may lead to deteriorating revenues or profits. Competition ??“ existing or potential ??“ is always a threat. Other threats may include intolerable price increases by suppliers, governmental regulation, economic downturns, devastating media or press coverage, a shift in consumer behavior that reduces your sales, or the introduction of a ???leap-frog??? technology that may make your products, equipment, or services obsolete.? It may be valuable to classify your threats according to their ???seriousness??? and ???probability of occurrence.???