SWOT Analysis: A Strategic Planning Tool
- Jojo is the CEO of a company.
- How does Jojo decide where to focus theefforts?
This is where SWOT analysis comes in, a tool that helps businesses understand their current position and plan strategically.
Definition
SWOT analysis
SWOT analysis is a strategic planning tool used to identify internal strengths and weaknesses and external opportunities and threats affecting an organization.
Breaking Down SWOT Analysis
1. Strengths: Internal Advantages
- Strengths are the internal factors that give a business a competitive edge.
- These are the unique qualities or resources that set the company apart.
A strong brand, loyal customer base, efficient supply chain, or innovative products.
TipWhen identifying strengths, focus on what your business does better than competitors.
2. Weaknesses: Internal Disadvantages
- Weaknesses are the internal factors that hinder a business' performance.
- These are areas where the company lacks or struggles.
High production costs, outdated technology, poor customer service, or lack of expertise.
Tip- Be honest when identifying weaknesses.
- Acknowledging them is the first step to improvement.
3. Opportunities: External Factors to Leverage
- Opportunities are external factors that a business can exploit to grow or improve.
- These are favorable trends or changes in the environment.
Market growth, technological advancements, changes in consumer preferences, or regulatory changes.
Tip- Look for opportunities that align with your strengths.
- This maximizes the potential for success.
