Changes
Changed 'initialism' to 'acronym' since SWOT is said as a word, not pronouncing each letter. See https://data.grammarbook.com/blog/abbreviations/abbreviations-acronyms-and-initialisms-revisited/
{{Other uses|SWOT (disambiguation){{!}}SWOT}}
{{pp-pc1}}
{{refimprove|date=May 2015}}
{{strategy}}
[[File:SWOT en.svg|thumb|A SWOT analysis, with its four elements in a 2×2 matrix.]]
'''SWOT analysis''' (or '''SWOT matrix''') is a strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to [[business]] competition or project planning.<ref>{{cite web|title=SWOT Analysis: Discover New Opportunities, Manage and Eliminate Threats|url=http://www.mindtools.com/pages/article/newTMC_05.htm|accessdate=24 February 2018|language=en|date=1006|website=www.mindtools.com}}</ref> It is intended to specify the objectives of the business venture or project and identify the internal and external factors that are favorable and unfavorable to achieving those objectives. Users of a SWOT analysis often ask and answer questions to generate meaningful information for each category to make the tool useful and identify their competitive advantage. SWOT has been described as the tried-and-true tool of strategic analysis.<ref name=":0">{{Cite book|title=Strategic Management|last=Dess|first=Gregory|publisher=McGraw-Hill|year=2018|isbn=9781259927621|location=United States|pages=73}}</ref>
Strengths and weakness are frequently internally-related, while opportunities and threats commonly focus on the external environment. The name is an acronym for the four parameters the technique examines:
* '''''S'''trengths'': characteristics of the business or project that give it an advantage over others.
* '''''W'''eaknesses'': characteristics of the business that place the business or project at a disadvantage relative to others.
* '''''O'''pportunities'': elements in the environment that the business or project could exploit to its advantage.
* '''''T'''hreats'': elements in the environment that could cause trouble for the business or project.
The degree to which the internal environment of the firm matches with the external environment is expressed by the concept of [[strategic fit]]. Identification of SWOTs is important because they can inform later steps in planning to achieve the objective. First, decision-makers should consider whether the objective is attainable, given the SWOTs. If the objective is ''not'' attainable, they must select a different objective and repeat the process.
Some authors credit SWOT to [[Albert S. Humphrey|Albert Humphrey]], who led a convention at the Stanford Research Institute (now [[SRI International]]) in the 1960s and 1970s using data from [[Fortune 500]] companies.<ref>{{cite news|url=http://www.sri.com/sites/default/files/brochures/dec-05.pdf|title=SWOT Analysis for Management Consulting|last=Humphrey|first=Albert|date=December 2005|work=SRI Alumni Newsletter|publisher=[[SRI International]]|authorlink=Albert S. Humphrey}}</ref><ref>{{cite web|url=http://www.tamplc.com/Humphsprofile.htm|title=Albert Humphrey The "Father" of TAM|publisher=TAM UK|accessdate=2012-06-03}}</ref> However, Humphrey himself did not claim the creation of SWOT, and the origins remain obscure.
== Internal and external factors ==
SWOT analysis aims to identify the key internal and external factors seen as important to achieving an objective. SWOT analysis groups key pieces of information into two main categories:
# Internal factors — the ''strengths'' and ''weaknesses'' internal to the organization
# External factors — the ''opportunities'' and ''threats'' presented by the environment external to the organization
Analysis may view the internal factors as strengths or as weaknesses depending upon their effect on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses (distractions, competition) for another objective. The factors may include all of the [[marketing mix|4Ps]] as well as [[personnel]], [[finance]], [[manufacturing]] capabilities, and so on.
The external factors may include [[macroeconomic]] matters, [[technological change]], [[legislation]], and sociocultural changes, as well as changes in the marketplace or in competitive position. The results are often presented in the form of a [[Table (information)|matrix]].
SWOT analysis is just one method of [[categorization]] and has its own weaknesses. For example, it may tend to persuade its users to compile lists rather than to think about actual important factors in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.
It is prudent not to eliminate any candidate SWOT entry too quickly. The importance of individual SWOTs will be revealed by the value of the strategies they generate. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.
== Use ==
The usefulness of SWOT analysis is not limited to [[For-profit corporation|profit-seeking organizations]]. SWOT analysis may be used in any decision-making situation when a desired end-state (objective) is defined. Examples include [[non-profit organizations]], governmental units, and individuals. SWOT analysis may also be used in pre-crisis planning and preventive [[crisis management]]. SWOT analysis may also be used in creating a recommendation during a [[viability study]]/survey.
=== Strategy building ===
SWOT analysis can be used effectively to build organizational or personal strategy. Steps necessary to execute strategy-oriented analysis involve identification of internal and external factors (using the popular 2x2 matrix), selection and evaluation of the most important factors, and identification of relations existing between internal and external features.<ref>{{cite news |last1=Blake |first1=Martin |last2=Wijetilaka |first2=Shehan |date=26 February 2015 |title=5 tips to grow your start-up using SWOT analysis |url=http://www.brw.com.au/p/entrepreneurs/tips_to_grow_your_start_up_using_eQEF8Pm8l2Q9hME9TBXvVL |location=Sydney |access-date=10 August 2015}}</ref>
For instance, strong relations between strengths and opportunities can suggest good conditions in the company and allow using an ''aggressive'' strategy. On the other hand, strong interactions between weaknesses and threats could be analyzed as a potential warning and advice for using a ''defensive'' strategy.<ref>{{cite journal |last=Osita |first=Christian |last2=Onyebuchi |first2=Idoko |last3=Justina |first3=Nzekwe |date=31 January 2014 |title=Organization's stability and productivity: the role of SWOT analysis |url=http://journalijiar.com/uploads/2014-10-02_231409_710.pdf |publisher=International Journal of Innovative and Applied Research (2014) |volume=2 |issue=9 |pages=23–32 |access-date=17 March 2016}}</ref>
=== Matching and converting ===
One way of using SWOT is matching and converting. Matching is used to find [[competitive advantage]] by matching the strengths to opportunities. Another tactic is to convert weaknesses or threats into strengths or opportunities. An example of a conversion strategy is to find new markets. If the threats or weaknesses cannot be converted, a company should try to minimize or avoid them.<ref>[http://www.shsu.edu/~mkt_ssm/mkt570/Chap04.ppt See for instance: Mehta, S. (2000) ''Marketing Strategy'']</ref>
=== Corporate planning ===
As part of the development of strategies and plans to enable the organization to achieve its objectives, that organization will use a systematic/rigorous process known as [[corporate planning]]. SWOT alongside [[PEST analysis|PEST]]/[[PESTLE]] can be used as a basis for the analysis of business and environmental factors.<ref>Armstrong. M. A handbook of Human Resource Management Practice (10th edition) 2006, Kogan Page, London {{ISBN|0-7494-4631-5}}</ref>
* Set objectives — defining what the organization is going to do
* Environmental scanning
** Internal appraisals of the organization's SWOT — this needs to include an assessment of the present situation as well as a portfolio of products/services and an analysis of the product/service lifecycle
* Analysis of existing strategies — this should determine relevance from the results of an internal/external appraisal. This may include [[gap analysis]] of environmental factors
* Strategic Issues defined — key factors in the development of a corporate plan that the organization must address
* Develop new/revised strategies — revised analysis of strategic issues may mean the objectives need to change
* Establish [[critical success factor]]s — the achievement of objectives and strategy implementation
* Preparation of operational, resource, projects plans for strategy implementation
* Monitoring all results — mapping against plans, taking corrective action, which may mean amending objectives/strategies<ref name=arms>Armstrong.M Management Processes and Functions, 1996, London CIPD {{ISBN|0-85292-438-0}}</ref>
=== Marketing ===
{{Main|Marketing management}}
In many competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation, degree of [[vertical integration]], historical responses to industry developments, and other factors.
Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. Accordingly, management often conducts market research (alternately marketing research) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common include:
* Qualitative marketing research such as focus groups
* Quantitative marketing research such as statistical surveys
* Experimental techniques such as test markets
* Observational techniques such as ethnographic (on-site) observation
* Marketing managers may also design and oversee various environmental scanning and competitive intelligence processes to help identify trends and inform the company's marketing analysis.
Below is an example SWOT analysis of a market position of a small management consultancy with specialism in HRM.<ref name=arms />
{| class="wikitable"
|-
! Strengths
! width=25% | Weaknesses
! width=25% | Opportunities
! width=25% | Threats
|- valign=top
| Reputation in marketplace
| Shortage of consultants at operating level rather than partner level
| Well established position with a well-defined market niche
| Large consultancies operating at a minor level
|- valign=top
| Expertise at partner level in HRM consultancy
| Unable to deal with multidisciplinary assignments because of size or lack of ability
| Identified market for consultancy in areas other than HRM
| Other small consultancies looking to invade the marketplace
|- valign=top
|}
== In community organization ==
The SWOT analysis has been used in community work as a tool to identify positive and negative factors within organizations, communities, and the broader society that promote or inhibit successful implementation of social services and social change efforts.<ref name="community tool box">{{cite web |title=Community Toolbox: Section 14. SWOT analysis |url=http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/main |accessdate=2014-02-22}}</ref> It is used as a preliminary resource, assessing strengths, weaknesses, opportunities, and threats in a community served by a nonprofit or community organization.<ref name="social work" /> This organizing tool is best used in collaboration with community workers and/or community members before developing goals and objectives for a program design or implementing an organizing strategy. The SWOT analysis is a part of the planning for social change process and will not provide a strategic plan if used by itself. After a SWOT analysis is completed, a social change organization can turn the SWOT list into a series of recommendations to consider before developing a strategic plan.<ref name="our community">{{cite web |title=Our Community |url=https://www.ourcommunity.com.au/boards/boards_article.jsp?articleId=1369 |accessdate=16 March 2014}}</ref>
[[File:SWOT Analysis ssw 1.png|thumb|one example of a SWOT Analysis used in community organizing]]
[[File:SWOT Analysis ssw 2.png|thumb|A simple SWOT Analysis used in Community Organizing]]
'''Strengths and weaknesses''' (''internal factors within an organization''):<ref name="community tool box" />
* Human resources — staff, volunteers, board members, target population
* Physical resources — your location, building, equipment
* Financial — grants, funding agencies, other sources of income
* Activities and processes — programs you run, systems you employ
* Past experiences — building blocks for learning and success, your reputation in the community
'''Opportunities and threats''' (''external factors stemming from community or societal forces''):<ref name="community tool box" />
* Future trends in your field or the culture
* The economy — local, national, or international
* Funding sources — foundations, donors, legislatures
* Demographics — changes in the age, race, gender, culture of those you serve or in your area
* The physical environment —is your building in a growing part of town? Is the bus company cutting routes?
* Legislation — do new federal requirements make your job harder...or easier?
* Local, national, or international events
Although the SWOT analysis was originally designed as an organizational method for business and industries, it has been replicated in various community work as a tool for identifying external and internal support to combat internal and external opposition.<ref name="community tool box" /> The SWOT analysis is necessary to provide direction to the next stages of the change process.<ref name=BOOK>{{cite book |last=Birkenmaier |first=Julie |title=The Practice of Generalist Social Work |year=2001 |publisher=Routledge |location=New York, NY}}</ref> It has been used by community organizers and community members to further social justice in the context of Social Work practice.
=== Application in community organization ===
As mentioned [[SWOT analysis#top|above]], SWOT can be crucial to determining the success of a project, while factoring in funding, as well as accessibility and logic. Often, a city will spend a year weighing the [[Risk-benefit]]s<ref>[[Pittsburg, California]] tried this out recently with the BART program. Citation: (Document). Pittsburg City, California, www.ci.pittsburg.ca.us/Modules/ShowDocument.aspx?documentid.</ref><ref>{{cite web |title=Urban Analysis of Urmia, Iran |url=http://rrrs.reviste.ubbcluj.ro/arhive/Artpdf/v10n22014/RRRS10220145.pdf |website=Reviste}}</ref> of a project before they even vote on it.
==== Elements to consider ====
Elements to consider in a SWOT analysis include understanding the community that a particular organization is working with. This can be done via public forums, listening campaigns, and informational interviews. Data collection will help inform the community members and workers when developing the SWOT analysis. A needs and assets assessment is tooling that can be used to identify the needs and existing resources of the community. When these assessments are done and data has been collected, an analysis of the community can be made that informs the SWOT analysis.<ref name="community tool box" />
==== Steps for implementation ====
A SWOT analysis is best developed in a group setting such as a work or community meeting. A facilitator can conduct the meeting by first explaining what a SWOT analysis is as well as identifying the meaning of each term.<ref name="community tool box" />
One way of facilitating the development of a SWOT analysis includes developing an example SWOT with the larger group then separating each group into smaller teams to present to the larger group after set amount of time.<ref name="community tool box" /> This allows for individuals, who may be silenced in a larger group setting, to contribute. Once the allotted time is up, the facilitator may record all the factors of each group onto a large document such as a poster board, and then the large group, as a collective, can go work through each of the threats and weaknesses to explore options that may be used to combat negative forces with the strengths and opportunities present within the organization and community.<ref name="community tool box" /> A SWOT meeting allows participants to creatively brainstorm, identify obstacles, and possibly strategize solutions/way forward to these limitations.
==== When to use SWOT analysis ====
The uses of a SWOT analysis by a community organization are as follows: to organize information, provide insight into barriers<ref name="use and misuse">{{cite journal |last=Chermack |first=Thomas J. |author2=Bernadette K. Kasshanna |title=The Use of and Misuse of SWOT analysis and implications for HRD professionals |journal=Human Resource Development International |date=December 2007 |volume=10 |issue=4 |pages=383–399}}</ref> that may be present while engaging in social change processes, and identify strengths available that can be activated to counteract these barriers.
''A SWOT analysis can be used to:''
* Explore new solutions to problems <ref name="community tool box" />
* Identify barriers that will limit goals/objectives <ref name="community tool box" />
* Decide on direction that will be most effective <ref name="community tool box" />
* Reveal possibilities and limitations for change<ref name="community tool box" />
* To revise plans to best navigate systems, communities, and organizations
* As a brainstorming and recording device as a means of communication<ref name="use and misuse" />
* To enhance "credibility of interpretation" to be used in presentation to leaders or key supporters.<ref name="social work">{{cite journal |last=Westhues |first=Anne |author2=Jean Lafrance |author3=Glen Schmidt |title=A SWOT analysis of social work education in Canada |journal=Social Work Education: The International Journal |year=2001 |volume=20 |issue=1 |pages=35–56}}</ref>
=== Benefits and advantages ===
The SWOT analysis in social work practice framework is beneficial because it helps organizations decide whether or not an objective is obtainable and therefore enables organizations to set achievable goals, objectives, and steps to further the social change or community development effort.<ref name=benefits>{{cite web |last=Quincy |first=Ronald |title=SWOT Analysis: Raising capacity of your organization |url=http://socialwork.rutgers.edu/Libraries/Huamin/Brochure_2.sflb |publisher=Rutgers School of Social Work |archiveurl=https://web.archive.org/web/20160417010302/http://socialwork.rutgers.edu/libraries/huamin/brochure_2.sflb |archivedate=2016-04-17 |accessdate=2013-02-25 |deadurl=yes |df= }}</ref> It enables organizers to take visions and produce practical and efficient outcomes that effect long-lasting change, and it helps organizations gather meaningful information to maximize their potential.<ref name="benefits" /> Completing a SWOT analysis is a useful process regarding the consideration of key organizational priorities, such as gender and cultural diversity and fundraising objectives.<ref name="change agency">{{cite web |title=Campaigners Toolkit: Strategy |publisher=The Change Agency |url=http://www.thechangeagency.org/campaigners-toolkit/training-resources/strategy/ |accessdate=28 September 2017}}</ref>
== Limitations ==
Some findings from Menon et al. (1999)<ref>{{cite journal |author=Menon, A. |title=Antecedents and Consequences of Marketing Strategy Making |journal=Journal of Marketing |volume=63 |pages=18–40 |year=1999 |doi=10.2307/1251943 |jstor=1251943 |issue=2 |publisher=American Marketing Association |display-authors=etal}}</ref> and Hill and Westbrook (1997)<ref>{{cite journal |author=Hill, T. & R. Westbrook |title=SWOT Analysis: It’s Time for a Product Recall |journal=Long Range Planning |volume=30 |issue=1 |pages=46–52 |year=1997 |doi=10.1016/S0024-6301(96)00095-7}}</ref> have suggested that SWOT may harm performance and that "no-one subsequently used the outputs within the later stages of the strategy".
Other critiques include the misuse of the SWOT analysis as a technique that can be quickly designed without critical thought leading to a misrepresentation of strengths, weaknesses, opportunities, and threats within an organization's internal and external surroundings.<ref name="SWOT does not need to be recalled">{{cite journal |last=Koch |first=Adam |title=SWOT does not need to be recalled: It needs to be enhanced |journal=Swineburne University of Technology |year=2000 |url=http://www.westga.edu/~bquest/2000/swot1.html}}</ref> If a firm becomes preoccupied with a single strength, such as cost control, they can neglect their weaknesses, such as product quality.<ref name=":0" />
Another limitation includes the development of a SWOT analysis simply to defend previously decided goals and objectives. This misuse leads to limitations on brainstorming possibilities and "real" identification of barriers. This misuse also places the organization’s interest above the well-being of the community. Further, a SWOT analysis should be developed as a collaborative with a variety of contributions made by participants including community members. The design of a SWOT analysis by one or two community workers is limiting to the realities of the forces, specifically external factors, and devalues the possible contributions of community members.<ref name="use and misuse" />
Overall, managers should remember that SWOT is a starting point for discussion and cannot, in itself, show managers how to achieve a competitive advantage.<ref name=":0" /> Because the SWOT analysis is a snapshot of the firm at a particular moment in time, the analysis might obscure the fact that both the internal and external environment are rapidly changing.<ref name=":0" />
== The SVOR alternative ==
In project management, the alternative to SWOT known by the acronym SVOR (Strengths, Vulnerabilities, Opportunities, and Risks) compares the project elements along two axes: internal and external, and positive and negative. It takes into account the mathematical link that exists between these various elements, considering also the role of infrastructures. The SVOR table provides an intricate understanding of the elements at play in a given project:<ref>Mesly, Olivier (2017). ''Project feasibility – Tools for uncovering points of vulnerability.'' New York, NY:Taylor and Francis, CRC Press, 546 pages, 9 {{ISBN|9781498757911}}.</ref>
{| class="wikitable"
|-
! Forces !! Internal !! Mathematical link !! External
|-
| '''Positive''' || Total Forces || Total Forces given constraints = Infrastructures / Opportunities || Opportunities
|-
| '''Mathematical link''' || Vulnerabilities given constraints = 1 / Total Forces || constant ''k'' || Opportunities given constraints = 1 / Risks
|-
| '''Negative''' || Vulnerabilities || Risks given constraints = ''k'' / Vulnerabilities || Risks
|}
Constraints consist of: calendar of tasks and activities, costs, and norms of quality. The "''k''" constant varies with each project (for example, it may be valued at 1.3).{{cn|date=February 2018}}{{efn|Best source I could find is https://ceopedia.org/index.php/SWOT_analysis but seems unrelated.}}
== SWOT analysis in popular culture ==
=== Ads ===
Many reports have been published about the use of SWOT by real life companies, and how the idea is spreading.{{which|date=October 2018}} [[Coca-Cola (company)|Coca-Cola]] has used this in their television ads<ref>{{cite web|url=http://www.valueline.com/Stocks/Highlights/The_Coca-Cola_Company__A_Short_SWOT_Analysis.aspx#.Wo36ULeov4g|title=Value Line - The Most Trusted Name in Investment Research|publisher=Value Line Publishing|website=www.valueline.com}}</ref> in order to effectively target a customer, such as appeal to senses.
=== Television shows ===
In the ''[[Silicon Valley (TV series)|Silicon Valley]]'' episode "Homicide" (Season 2, Episode 6), Jared Dunn ([[Zach Woods]]) introduces the Pied Piper team to SWOT analysis. Later in that episode Dinesh ([[Kumail Nanjiani]]) and Gilfoyle ([[Martin Starr]]) employ the method when deciding whether or not to inform a stunt driver that the calculations for his upcoming jump were performed incorrectly.<ref>{{cite website|url=https://www.hbo.com/silicon-valley/season-02/6-homicide/synopsis|website=HBO|title=Synopsis: ''Silicon Valley'' - 'Homicide'}}</ref>
== See also ==
{{div col|colwidth=30em}}
* [[Benchmarking]]
* [[Enterprise planning systems]]
* [[PEST analysis]]
* [[Porter's Four Corners Model]]
* [[Programme Evaluation and Review Technique]] (PERT)
* [[Project planning]]
* [[Semiotic square]] (Greimas square)
* [[Six Forces Model]]
* [[Strategic planning]]
* [[VRIO]] (Value, Rarity, Imitability, Organization)
{{div col end}}
== References ==
{{Reflist|30em}}
=== Footnotes ===
{{Notelist}}
== External links ==
{{Commons category|SWOT analysis}}
* [http://www.rma.usda.gov/pubs/2011/swot_brochure.pdf "SWOT Analysis: A tool for making better business decisions"]. [[United States Department of Agriculture]].
{{Strategic planning tools}}
{{authority control}}
[[Category:Business intelligence]]
[[Category:Strategic management]]
{{pp-pc1}}
{{refimprove|date=May 2015}}
{{strategy}}
[[File:SWOT en.svg|thumb|A SWOT analysis, with its four elements in a 2×2 matrix.]]
'''SWOT analysis''' (or '''SWOT matrix''') is a strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to [[business]] competition or project planning.<ref>{{cite web|title=SWOT Analysis: Discover New Opportunities, Manage and Eliminate Threats|url=http://www.mindtools.com/pages/article/newTMC_05.htm|accessdate=24 February 2018|language=en|date=1006|website=www.mindtools.com}}</ref> It is intended to specify the objectives of the business venture or project and identify the internal and external factors that are favorable and unfavorable to achieving those objectives. Users of a SWOT analysis often ask and answer questions to generate meaningful information for each category to make the tool useful and identify their competitive advantage. SWOT has been described as the tried-and-true tool of strategic analysis.<ref name=":0">{{Cite book|title=Strategic Management|last=Dess|first=Gregory|publisher=McGraw-Hill|year=2018|isbn=9781259927621|location=United States|pages=73}}</ref>
Strengths and weakness are frequently internally-related, while opportunities and threats commonly focus on the external environment. The name is an acronym for the four parameters the technique examines:
* '''''S'''trengths'': characteristics of the business or project that give it an advantage over others.
* '''''W'''eaknesses'': characteristics of the business that place the business or project at a disadvantage relative to others.
* '''''O'''pportunities'': elements in the environment that the business or project could exploit to its advantage.
* '''''T'''hreats'': elements in the environment that could cause trouble for the business or project.
The degree to which the internal environment of the firm matches with the external environment is expressed by the concept of [[strategic fit]]. Identification of SWOTs is important because they can inform later steps in planning to achieve the objective. First, decision-makers should consider whether the objective is attainable, given the SWOTs. If the objective is ''not'' attainable, they must select a different objective and repeat the process.
Some authors credit SWOT to [[Albert S. Humphrey|Albert Humphrey]], who led a convention at the Stanford Research Institute (now [[SRI International]]) in the 1960s and 1970s using data from [[Fortune 500]] companies.<ref>{{cite news|url=http://www.sri.com/sites/default/files/brochures/dec-05.pdf|title=SWOT Analysis for Management Consulting|last=Humphrey|first=Albert|date=December 2005|work=SRI Alumni Newsletter|publisher=[[SRI International]]|authorlink=Albert S. Humphrey}}</ref><ref>{{cite web|url=http://www.tamplc.com/Humphsprofile.htm|title=Albert Humphrey The "Father" of TAM|publisher=TAM UK|accessdate=2012-06-03}}</ref> However, Humphrey himself did not claim the creation of SWOT, and the origins remain obscure.
== Internal and external factors ==
SWOT analysis aims to identify the key internal and external factors seen as important to achieving an objective. SWOT analysis groups key pieces of information into two main categories:
# Internal factors — the ''strengths'' and ''weaknesses'' internal to the organization
# External factors — the ''opportunities'' and ''threats'' presented by the environment external to the organization
Analysis may view the internal factors as strengths or as weaknesses depending upon their effect on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses (distractions, competition) for another objective. The factors may include all of the [[marketing mix|4Ps]] as well as [[personnel]], [[finance]], [[manufacturing]] capabilities, and so on.
The external factors may include [[macroeconomic]] matters, [[technological change]], [[legislation]], and sociocultural changes, as well as changes in the marketplace or in competitive position. The results are often presented in the form of a [[Table (information)|matrix]].
SWOT analysis is just one method of [[categorization]] and has its own weaknesses. For example, it may tend to persuade its users to compile lists rather than to think about actual important factors in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.
It is prudent not to eliminate any candidate SWOT entry too quickly. The importance of individual SWOTs will be revealed by the value of the strategies they generate. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.
== Use ==
The usefulness of SWOT analysis is not limited to [[For-profit corporation|profit-seeking organizations]]. SWOT analysis may be used in any decision-making situation when a desired end-state (objective) is defined. Examples include [[non-profit organizations]], governmental units, and individuals. SWOT analysis may also be used in pre-crisis planning and preventive [[crisis management]]. SWOT analysis may also be used in creating a recommendation during a [[viability study]]/survey.
=== Strategy building ===
SWOT analysis can be used effectively to build organizational or personal strategy. Steps necessary to execute strategy-oriented analysis involve identification of internal and external factors (using the popular 2x2 matrix), selection and evaluation of the most important factors, and identification of relations existing between internal and external features.<ref>{{cite news |last1=Blake |first1=Martin |last2=Wijetilaka |first2=Shehan |date=26 February 2015 |title=5 tips to grow your start-up using SWOT analysis |url=http://www.brw.com.au/p/entrepreneurs/tips_to_grow_your_start_up_using_eQEF8Pm8l2Q9hME9TBXvVL |location=Sydney |access-date=10 August 2015}}</ref>
For instance, strong relations between strengths and opportunities can suggest good conditions in the company and allow using an ''aggressive'' strategy. On the other hand, strong interactions between weaknesses and threats could be analyzed as a potential warning and advice for using a ''defensive'' strategy.<ref>{{cite journal |last=Osita |first=Christian |last2=Onyebuchi |first2=Idoko |last3=Justina |first3=Nzekwe |date=31 January 2014 |title=Organization's stability and productivity: the role of SWOT analysis |url=http://journalijiar.com/uploads/2014-10-02_231409_710.pdf |publisher=International Journal of Innovative and Applied Research (2014) |volume=2 |issue=9 |pages=23–32 |access-date=17 March 2016}}</ref>
=== Matching and converting ===
One way of using SWOT is matching and converting. Matching is used to find [[competitive advantage]] by matching the strengths to opportunities. Another tactic is to convert weaknesses or threats into strengths or opportunities. An example of a conversion strategy is to find new markets. If the threats or weaknesses cannot be converted, a company should try to minimize or avoid them.<ref>[http://www.shsu.edu/~mkt_ssm/mkt570/Chap04.ppt See for instance: Mehta, S. (2000) ''Marketing Strategy'']</ref>
=== Corporate planning ===
As part of the development of strategies and plans to enable the organization to achieve its objectives, that organization will use a systematic/rigorous process known as [[corporate planning]]. SWOT alongside [[PEST analysis|PEST]]/[[PESTLE]] can be used as a basis for the analysis of business and environmental factors.<ref>Armstrong. M. A handbook of Human Resource Management Practice (10th edition) 2006, Kogan Page, London {{ISBN|0-7494-4631-5}}</ref>
* Set objectives — defining what the organization is going to do
* Environmental scanning
** Internal appraisals of the organization's SWOT — this needs to include an assessment of the present situation as well as a portfolio of products/services and an analysis of the product/service lifecycle
* Analysis of existing strategies — this should determine relevance from the results of an internal/external appraisal. This may include [[gap analysis]] of environmental factors
* Strategic Issues defined — key factors in the development of a corporate plan that the organization must address
* Develop new/revised strategies — revised analysis of strategic issues may mean the objectives need to change
* Establish [[critical success factor]]s — the achievement of objectives and strategy implementation
* Preparation of operational, resource, projects plans for strategy implementation
* Monitoring all results — mapping against plans, taking corrective action, which may mean amending objectives/strategies<ref name=arms>Armstrong.M Management Processes and Functions, 1996, London CIPD {{ISBN|0-85292-438-0}}</ref>
=== Marketing ===
{{Main|Marketing management}}
In many competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation, degree of [[vertical integration]], historical responses to industry developments, and other factors.
Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. Accordingly, management often conducts market research (alternately marketing research) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common include:
* Qualitative marketing research such as focus groups
* Quantitative marketing research such as statistical surveys
* Experimental techniques such as test markets
* Observational techniques such as ethnographic (on-site) observation
* Marketing managers may also design and oversee various environmental scanning and competitive intelligence processes to help identify trends and inform the company's marketing analysis.
Below is an example SWOT analysis of a market position of a small management consultancy with specialism in HRM.<ref name=arms />
{| class="wikitable"
|-
! Strengths
! width=25% | Weaknesses
! width=25% | Opportunities
! width=25% | Threats
|- valign=top
| Reputation in marketplace
| Shortage of consultants at operating level rather than partner level
| Well established position with a well-defined market niche
| Large consultancies operating at a minor level
|- valign=top
| Expertise at partner level in HRM consultancy
| Unable to deal with multidisciplinary assignments because of size or lack of ability
| Identified market for consultancy in areas other than HRM
| Other small consultancies looking to invade the marketplace
|- valign=top
|}
== In community organization ==
The SWOT analysis has been used in community work as a tool to identify positive and negative factors within organizations, communities, and the broader society that promote or inhibit successful implementation of social services and social change efforts.<ref name="community tool box">{{cite web |title=Community Toolbox: Section 14. SWOT analysis |url=http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/main |accessdate=2014-02-22}}</ref> It is used as a preliminary resource, assessing strengths, weaknesses, opportunities, and threats in a community served by a nonprofit or community organization.<ref name="social work" /> This organizing tool is best used in collaboration with community workers and/or community members before developing goals and objectives for a program design or implementing an organizing strategy. The SWOT analysis is a part of the planning for social change process and will not provide a strategic plan if used by itself. After a SWOT analysis is completed, a social change organization can turn the SWOT list into a series of recommendations to consider before developing a strategic plan.<ref name="our community">{{cite web |title=Our Community |url=https://www.ourcommunity.com.au/boards/boards_article.jsp?articleId=1369 |accessdate=16 March 2014}}</ref>
[[File:SWOT Analysis ssw 1.png|thumb|one example of a SWOT Analysis used in community organizing]]
[[File:SWOT Analysis ssw 2.png|thumb|A simple SWOT Analysis used in Community Organizing]]
'''Strengths and weaknesses''' (''internal factors within an organization''):<ref name="community tool box" />
* Human resources — staff, volunteers, board members, target population
* Physical resources — your location, building, equipment
* Financial — grants, funding agencies, other sources of income
* Activities and processes — programs you run, systems you employ
* Past experiences — building blocks for learning and success, your reputation in the community
'''Opportunities and threats''' (''external factors stemming from community or societal forces''):<ref name="community tool box" />
* Future trends in your field or the culture
* The economy — local, national, or international
* Funding sources — foundations, donors, legislatures
* Demographics — changes in the age, race, gender, culture of those you serve or in your area
* The physical environment —is your building in a growing part of town? Is the bus company cutting routes?
* Legislation — do new federal requirements make your job harder...or easier?
* Local, national, or international events
Although the SWOT analysis was originally designed as an organizational method for business and industries, it has been replicated in various community work as a tool for identifying external and internal support to combat internal and external opposition.<ref name="community tool box" /> The SWOT analysis is necessary to provide direction to the next stages of the change process.<ref name=BOOK>{{cite book |last=Birkenmaier |first=Julie |title=The Practice of Generalist Social Work |year=2001 |publisher=Routledge |location=New York, NY}}</ref> It has been used by community organizers and community members to further social justice in the context of Social Work practice.
=== Application in community organization ===
As mentioned [[SWOT analysis#top|above]], SWOT can be crucial to determining the success of a project, while factoring in funding, as well as accessibility and logic. Often, a city will spend a year weighing the [[Risk-benefit]]s<ref>[[Pittsburg, California]] tried this out recently with the BART program. Citation: (Document). Pittsburg City, California, www.ci.pittsburg.ca.us/Modules/ShowDocument.aspx?documentid.</ref><ref>{{cite web |title=Urban Analysis of Urmia, Iran |url=http://rrrs.reviste.ubbcluj.ro/arhive/Artpdf/v10n22014/RRRS10220145.pdf |website=Reviste}}</ref> of a project before they even vote on it.
==== Elements to consider ====
Elements to consider in a SWOT analysis include understanding the community that a particular organization is working with. This can be done via public forums, listening campaigns, and informational interviews. Data collection will help inform the community members and workers when developing the SWOT analysis. A needs and assets assessment is tooling that can be used to identify the needs and existing resources of the community. When these assessments are done and data has been collected, an analysis of the community can be made that informs the SWOT analysis.<ref name="community tool box" />
==== Steps for implementation ====
A SWOT analysis is best developed in a group setting such as a work or community meeting. A facilitator can conduct the meeting by first explaining what a SWOT analysis is as well as identifying the meaning of each term.<ref name="community tool box" />
One way of facilitating the development of a SWOT analysis includes developing an example SWOT with the larger group then separating each group into smaller teams to present to the larger group after set amount of time.<ref name="community tool box" /> This allows for individuals, who may be silenced in a larger group setting, to contribute. Once the allotted time is up, the facilitator may record all the factors of each group onto a large document such as a poster board, and then the large group, as a collective, can go work through each of the threats and weaknesses to explore options that may be used to combat negative forces with the strengths and opportunities present within the organization and community.<ref name="community tool box" /> A SWOT meeting allows participants to creatively brainstorm, identify obstacles, and possibly strategize solutions/way forward to these limitations.
==== When to use SWOT analysis ====
The uses of a SWOT analysis by a community organization are as follows: to organize information, provide insight into barriers<ref name="use and misuse">{{cite journal |last=Chermack |first=Thomas J. |author2=Bernadette K. Kasshanna |title=The Use of and Misuse of SWOT analysis and implications for HRD professionals |journal=Human Resource Development International |date=December 2007 |volume=10 |issue=4 |pages=383–399}}</ref> that may be present while engaging in social change processes, and identify strengths available that can be activated to counteract these barriers.
''A SWOT analysis can be used to:''
* Explore new solutions to problems <ref name="community tool box" />
* Identify barriers that will limit goals/objectives <ref name="community tool box" />
* Decide on direction that will be most effective <ref name="community tool box" />
* Reveal possibilities and limitations for change<ref name="community tool box" />
* To revise plans to best navigate systems, communities, and organizations
* As a brainstorming and recording device as a means of communication<ref name="use and misuse" />
* To enhance "credibility of interpretation" to be used in presentation to leaders or key supporters.<ref name="social work">{{cite journal |last=Westhues |first=Anne |author2=Jean Lafrance |author3=Glen Schmidt |title=A SWOT analysis of social work education in Canada |journal=Social Work Education: The International Journal |year=2001 |volume=20 |issue=1 |pages=35–56}}</ref>
=== Benefits and advantages ===
The SWOT analysis in social work practice framework is beneficial because it helps organizations decide whether or not an objective is obtainable and therefore enables organizations to set achievable goals, objectives, and steps to further the social change or community development effort.<ref name=benefits>{{cite web |last=Quincy |first=Ronald |title=SWOT Analysis: Raising capacity of your organization |url=http://socialwork.rutgers.edu/Libraries/Huamin/Brochure_2.sflb |publisher=Rutgers School of Social Work |archiveurl=https://web.archive.org/web/20160417010302/http://socialwork.rutgers.edu/libraries/huamin/brochure_2.sflb |archivedate=2016-04-17 |accessdate=2013-02-25 |deadurl=yes |df= }}</ref> It enables organizers to take visions and produce practical and efficient outcomes that effect long-lasting change, and it helps organizations gather meaningful information to maximize their potential.<ref name="benefits" /> Completing a SWOT analysis is a useful process regarding the consideration of key organizational priorities, such as gender and cultural diversity and fundraising objectives.<ref name="change agency">{{cite web |title=Campaigners Toolkit: Strategy |publisher=The Change Agency |url=http://www.thechangeagency.org/campaigners-toolkit/training-resources/strategy/ |accessdate=28 September 2017}}</ref>
== Limitations ==
Some findings from Menon et al. (1999)<ref>{{cite journal |author=Menon, A. |title=Antecedents and Consequences of Marketing Strategy Making |journal=Journal of Marketing |volume=63 |pages=18–40 |year=1999 |doi=10.2307/1251943 |jstor=1251943 |issue=2 |publisher=American Marketing Association |display-authors=etal}}</ref> and Hill and Westbrook (1997)<ref>{{cite journal |author=Hill, T. & R. Westbrook |title=SWOT Analysis: It’s Time for a Product Recall |journal=Long Range Planning |volume=30 |issue=1 |pages=46–52 |year=1997 |doi=10.1016/S0024-6301(96)00095-7}}</ref> have suggested that SWOT may harm performance and that "no-one subsequently used the outputs within the later stages of the strategy".
Other critiques include the misuse of the SWOT analysis as a technique that can be quickly designed without critical thought leading to a misrepresentation of strengths, weaknesses, opportunities, and threats within an organization's internal and external surroundings.<ref name="SWOT does not need to be recalled">{{cite journal |last=Koch |first=Adam |title=SWOT does not need to be recalled: It needs to be enhanced |journal=Swineburne University of Technology |year=2000 |url=http://www.westga.edu/~bquest/2000/swot1.html}}</ref> If a firm becomes preoccupied with a single strength, such as cost control, they can neglect their weaknesses, such as product quality.<ref name=":0" />
Another limitation includes the development of a SWOT analysis simply to defend previously decided goals and objectives. This misuse leads to limitations on brainstorming possibilities and "real" identification of barriers. This misuse also places the organization’s interest above the well-being of the community. Further, a SWOT analysis should be developed as a collaborative with a variety of contributions made by participants including community members. The design of a SWOT analysis by one or two community workers is limiting to the realities of the forces, specifically external factors, and devalues the possible contributions of community members.<ref name="use and misuse" />
Overall, managers should remember that SWOT is a starting point for discussion and cannot, in itself, show managers how to achieve a competitive advantage.<ref name=":0" /> Because the SWOT analysis is a snapshot of the firm at a particular moment in time, the analysis might obscure the fact that both the internal and external environment are rapidly changing.<ref name=":0" />
== The SVOR alternative ==
In project management, the alternative to SWOT known by the acronym SVOR (Strengths, Vulnerabilities, Opportunities, and Risks) compares the project elements along two axes: internal and external, and positive and negative. It takes into account the mathematical link that exists between these various elements, considering also the role of infrastructures. The SVOR table provides an intricate understanding of the elements at play in a given project:<ref>Mesly, Olivier (2017). ''Project feasibility – Tools for uncovering points of vulnerability.'' New York, NY:Taylor and Francis, CRC Press, 546 pages, 9 {{ISBN|9781498757911}}.</ref>
{| class="wikitable"
|-
! Forces !! Internal !! Mathematical link !! External
|-
| '''Positive''' || Total Forces || Total Forces given constraints = Infrastructures / Opportunities || Opportunities
|-
| '''Mathematical link''' || Vulnerabilities given constraints = 1 / Total Forces || constant ''k'' || Opportunities given constraints = 1 / Risks
|-
| '''Negative''' || Vulnerabilities || Risks given constraints = ''k'' / Vulnerabilities || Risks
|}
Constraints consist of: calendar of tasks and activities, costs, and norms of quality. The "''k''" constant varies with each project (for example, it may be valued at 1.3).{{cn|date=February 2018}}{{efn|Best source I could find is https://ceopedia.org/index.php/SWOT_analysis but seems unrelated.}}
== SWOT analysis in popular culture ==
=== Ads ===
Many reports have been published about the use of SWOT by real life companies, and how the idea is spreading.{{which|date=October 2018}} [[Coca-Cola (company)|Coca-Cola]] has used this in their television ads<ref>{{cite web|url=http://www.valueline.com/Stocks/Highlights/The_Coca-Cola_Company__A_Short_SWOT_Analysis.aspx#.Wo36ULeov4g|title=Value Line - The Most Trusted Name in Investment Research|publisher=Value Line Publishing|website=www.valueline.com}}</ref> in order to effectively target a customer, such as appeal to senses.
=== Television shows ===
In the ''[[Silicon Valley (TV series)|Silicon Valley]]'' episode "Homicide" (Season 2, Episode 6), Jared Dunn ([[Zach Woods]]) introduces the Pied Piper team to SWOT analysis. Later in that episode Dinesh ([[Kumail Nanjiani]]) and Gilfoyle ([[Martin Starr]]) employ the method when deciding whether or not to inform a stunt driver that the calculations for his upcoming jump were performed incorrectly.<ref>{{cite website|url=https://www.hbo.com/silicon-valley/season-02/6-homicide/synopsis|website=HBO|title=Synopsis: ''Silicon Valley'' - 'Homicide'}}</ref>
== See also ==
{{div col|colwidth=30em}}
* [[Benchmarking]]
* [[Enterprise planning systems]]
* [[PEST analysis]]
* [[Porter's Four Corners Model]]
* [[Programme Evaluation and Review Technique]] (PERT)
* [[Project planning]]
* [[Semiotic square]] (Greimas square)
* [[Six Forces Model]]
* [[Strategic planning]]
* [[VRIO]] (Value, Rarity, Imitability, Organization)
{{div col end}}
== References ==
{{Reflist|30em}}
=== Footnotes ===
{{Notelist}}
== External links ==
{{Commons category|SWOT analysis}}
* [http://www.rma.usda.gov/pubs/2011/swot_brochure.pdf "SWOT Analysis: A tool for making better business decisions"]. [[United States Department of Agriculture]].
{{Strategic planning tools}}
{{authority control}}
[[Category:Business intelligence]]
[[Category:Strategic management]]
