SWOT Analysis

The following five steps will help you to use SWOT analysis in your company and to decide on the best course of action based on the results. (Lombriser & Abplanap 2005). The table below provides an outline of how to implement strategies when considering your strengths, weaknesses, opportunities and threats.

Figure 8: SWOT analysis: Ten Have et al. (2003)

Key rules for SWOT analysis

Identification of decisive success factors: It is very helpful for the strengths-weaknesses analysis to identify decisive success factors. This is an important task, but normally you know them and you can easily sketch them.

  1. Determination of strengths and weaknesses:
    In a strengths-weaknesses analysis the competitive position of your company in relation to the strongest competitor(s) is identified. In considering comparable factors you should only take into account those points that are really comparable (is such data really available?). Consider that all identified strengths and weaknesses are relative. As they are relative they gain informative value only through benchmarking (see previous subsection).
  2. Determination of opportunities and risks:
    This part of the SWOT analysis discovers opportunities and threats that result from new trends and changes in your environment. Factors that do not influence your company directly are considered to be external factors in the SWOT analysis. E.g. high customer loyalty can be classified as an internal strength, but can turn into a threat, if traditional customer ties become less important.
  3. Processing of the questionnaire and answering of key questions:
    In this step you should answer questions that mostly relate to the sector in which you are engaged.
  4. Deduction of strategic conclusions:
    If you can anticipate and react to present and future changes, you have achieved one of the major goals of a SWOT analysis.

EXERCISE: Can you identify the success factors in your sector? Which are your strengths and weaknesses, opportunities and threats?