SWOT ANALYSIS


CLASS
A
PHASE
Internal Mapping
APPLICATION FIELDS
Business strategy, Product/Service Development
ASSUMPTIONS
This technique is usually carried out through questionnaires. In this case, a consistent set of respondents must be chosen among internal staff for the questionnaire to be truly effective. This technique may be used also in specific internal meetings, without having to resort to questionnaires (see Brainstorming).
PROS
This techniques does not require any particular training. It is also already well known among companies.
CONS
When using the more structured questionnaire approach, a different kind of questionnaire is needed for each kind of business. Creating a proper set of questions for a given company or business unit may be difficult and time-consuming. The questionnaires must be given out to a consistent number of personnel in order to be effective.
DESCRIPTION

SWOT analysis (S-trenghts W-eaknesses T-hreats O-pportunities) is a method used to analyse the competition context and product strategies in particular. It deals with the impact of the main internal factors (i.e.: organizational structure, culture, competences, partnership networks etc.) and the main external factors (i.e.: technology level in the sector, competitors’ position, etc.) which define a firm’s or a business unit’s market position, in order to develop a competitive strategy. It is based on a matrix divided in 4 areas:

Strengths Weakness
Opportunities Threats

Fig1. SWOT analysis matrix

Strengths: resources, competences and inputs which enable an organisation to enforce strategies supporting its own mission.

For instance, answers should be found for these classical questions:

  • Which are our own advantages?
  • What are we able to do quite well?
  • What strategic resources can we rely upon?
It is important to connect strength factors with competitors; for instance, if all the competitors are offering high-quality products, then high-quality production should not be considered an advantage but a necessity.

Weaknesses: elements that may interfere with the realization of the strategy.
In order to identify weak areas these questions may be useful:
  • What could we enhance?
  • What should we avoid to do?
  • What are we doing poorly?
In this case it is very important to be realistic and not to conceal a problem, but on the contrary to let them come out and confront them as soon as possible.

Opportunities: areas of the external environment which may enable a company to obtain great performances, if they are correctly identified and exploited.
In order to single out opportinities, you may ask:

  • Where are future opportunities positioned?
  • Which are the most interesting trends that we know?

Threats: areas of the external environment that may affect negatively on the performances of the firm.

In order to identify possible and existing threats:
  • What obstacles must we face?
  • What are competitors doing?
  • Are the perceived needs about our products/services changing?
  • Does the technological evolution threaten our position?
To sum up, this analysis helps the management to focus on their own strong key points, minimize weak points, obtain the most advantage from upcoming opportunities, and, if possible, change threats into new opportunities. Moreover, people are compelled to analyze a problem from 4 different and contrasting points of view.

In order to obtain a detailed SWOT matrix, a useful tool is a detailed questionnaire given out to internal personnel.

SWOT ANALYSIS: An Example Questionnaire for Customer Care Management

TRAINING MATERIAL
REFERENCES
  • Boone, L., Kurtz, D. 1992. Contemporary Marketing. Fort Worth, TX: Dryden Press