S.W.O.T. Analysis is a very effective way of identifying Strengths and Weaknesses, and of examining the Opportunities and Threats faced by companies today. Carrying out an analysis using the SWOT framework helps focus activities into areas of strength and where the greatest opportunities lie.
In order to carry out a successful SWOT Analysis, the following questions need to be answered.
In the area of Strengths the following should be used:
1) What advantages does the company hold?
2) What does the company do well?,
3) What relevant resources does the company have?,
4) What do other people see as the company’s strengths?
In the area of Weaknesses the following questions should be used:
1) What can the company improve?
2) What does the company do badly?,
3) What should the company avoid?
This is considered from an internal and external basis. Consideration has been given as to whether other people seem to perceive weaknesses that are not seen.
In the area of Opportunities the following questions should be used:
1) Where are the good opportunities facing the company?
2) What are the interesting trends the company must be aware of?
Useful opportunities can come from such things as:
1) Changes in technology and markets on both a broad and narrow scale.
2) Changes in government policy related to your field.
3) Changes in social patterns, population profiles, lifestyle changes, etc.
4) Local Events.
After looking at the opportunities and strengths the question was asked whether these open up any opportunities. Alternatively, the weaknesses were looked at and the question was asked whether these open up opportunities by eliminating the weaknesses.
In the area of Threats the following questions were used:
1) What obstacles does the company face?,
2) What is the competition doing?,
3) Are the required specifications for the job, products or services changing?,
4) Is changing technology threatening the position?,
5) Do bad debt or cash-flow problems exist?,
6) Could any of the weaknesses seriously threaten the business?
By using these questions, one can easily understand the structure of a given company with respects to a SWOT analysis. Of course, a little research and some interviewing will always make for the most accurate results.