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Indentifying Strengths, Weaknesses, Opportunities and Threats |
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SWOT Analysis |
Summary of SWOT. Abstract |
A SWOT analysis is an instrumental framework in Value Based Management and Strategy Formulation to identify the Strengths, Weaknesses, Opportunities and Threats for a particular company. Strengths and Weaknesses are internal value creating (or destroying) factors such as assets, skills or resources a company has at its disposal relatively to its competitors. They can be measured using internal assessments or external benchmarking. Opportunities and Threats are external value creating (or destroying) factors a company cannot control, but emerge from either the competitive dynamics of the industry/market or from demographic, economic, political, technical, social, legal or cultural factors. Typical examples of factors in a SWOT Analysis are:
Any organization must try to create a fit with its external environment. The SWOT diagram is a very good tool for analyzing the (internal) strengths and weaknesses of a corporation and the (external) opportunities and threats. However, this analysis is just the first step. Actually creating alignment is often a more hazardous job, because in reality the two sides of the SWOT analysis often point in opposite directions, leaving strategists with the paradox of creating alignment either from the outside-in (market-driven strategy) or from the inside-out (resource driven strategy). T I P : Here you can discuss and learn a lot more about SWOT Analysis. Compare: Core Competence | Parenting Advantage | Porter's five forces model | Outsourcing | Industry Change | OODA Loop | BCG Matrix | GE Matrix
Tip: One can also apply a SWOT analysis to competitors. This may reveal some interesting insights... |
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