SWOT Analysis Swot

A SWOT analysis is a tool that identifies internal and external factors that may affect an organization. According to Parnell (2014), a SWOT analysis allows managers to investigate the strengths, weaknesses, opportunities, and threats that a company may face in their environment. Strengths and weaknesses are typically internal factors; while opportunities and threats are external factors. A company’s strengths are the things that set them apart and make them different or better than anyone else in their industry. The weaknesses are the things that affect them in a negative manner that keep the company from being competitive. Development of a SWOT allows the company to identify and take advantage of the opportunity to strengthen the organization

These factors are typically associated with uncontrollable external factors that affect the company. It is easy to accidently include weaknesses of a company as a threat, however, if they are internal factors they will only be included in the weaknesses section of the SWOT analysis (Parnell, 2014). Opportunities and threats can be determined by conducting a PEST analysis. A PEST analysis is the analysis of the political, economic, social, and technological forces that affect the activities and performance of a company in the environment in which it exists (Jurevicius, 2013a). Other things that may be considered opportunities or threats are future business trends, changes in the culture of the firm, the economy, demographics, changes associated with the physical environment where the company is located, and governmental

It is a tool that is used to generate different courses of action other than those that are obvious in nature. The SW/OT matrix helps the company generate strategic alternatives, and allows managers to position a firm so that it can “leverage strengths and reduce or eliminate risks associated with weaknesses” (Parnell, 2014). Traditionally the matrix is constructed in a grid like format with the strengths and weaknesses on the left side of the grid and the opportunities listed on the top. In the middle, is where the alternative solutions are documented. According to Parnell (2014), the compilation of strengths and weakness with the opportunities and threats will result in four distinct potential combinations of outcomes: strength-opportunity, weakness-threat, strength-threat, and