Strategic Planning

2011 January 14

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieve that objective

A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model.

• Strengths: characteristics of the business or team that give it an advantage over others in the industry.
• Weaknesses: are characteristics that place the firm at a disadvantage relative to others.
• Opportunities: external chances to make greater sales or profits in the environment.
• Threats: external elements in the environment that could cause trouble for the business.

It is important to evaluate a company using SWOT manner due to the fact that it is possible to asses company effectiveness in different markets based on certain factors that are important for your business. While this tool is not commonly used by Small business it can prove to be of great value when used skilfully.