SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a project in a business venture. It involves specifying the objectives of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieve those objectives.
Why is SWOT analysis important for business strategy?
The SWOT analysis can be used as a simple tool to start conversations in strategy sessions. But it can also be used as a powerful business strategy tool in more complex scenarios and with more profound analysis. In a general sense, SWOT analysis allows business and companies to be honest about their inner qualities and weaknesses. This helps managers identify and prioritize overall operations, strategy or company changes. In the case of a new business, it helps identify the best track for company success.
Here is an example of SWOT Analysis of any Machinery Supplier Company.
|Selling products directly to the customers
Keeping costs below that of competitors
Higher responsiveness to customer demands
|No partnerships or strong relationships with computer retailers|
|Desire of customers for one-stop shopping without delay
Customers’ increasing knowledge about what they want in machinary
Internet as a marketing tool
|Stronger brand name of competitors like other companies
Strong relationship of competitors with retailers