Page 27 - (DK) The Business Book

START SMALL, THINK BIG 25

See also: Stand out in the market 28–31 ■ Gaining an edge 32–39 ■ Thinking outside the box 88–89 ■ Leading the market
166–69 ■ Porter’s generic strategies 178–83 ■ The MABA matrix 192–93 ■ Porter’s five forces 212–15

Strengths (S).

...key internal factors,
such as:

Weaknesses (W).
SWOT analysis helps
a company analyze
its position by
focusing on...
Opportunities (O).

...key external factors,
such as:
Threats (T).

trash. But there is a range of more courses. It is a creative tool that included, the deeper the analysis
conventional tools to help companies allows managers to assess a and the more useful the findings.
to understand themselves, their company’s current position, and to However, there are limitations. While
markets, and their competition. imagine possible future positions. a company may be able to judge its
internal weaknesses and strengths
SWOT analysis A practical tool accurately, projections about future
The most popular such tool is When well-executed, a SWOT events and trends (which will affect
SWOT analysis. Created by US analysis should inform strategic opportunities and threats) are
management consultant Albert planning and decision-making. It always subject to error. Different
Humphrey in 1966, it is used to allows a company to identify what stakeholders will also be privy to
identify internal strengths (S) and it does better than rivals (or vice different levels of information about
weaknesses (W), and to analyze versa), what changes it may need to a company’s activities, and therefore
external opportunities (O) and make to minimize threats, and what its current position. Balance is key; ❯❯
threats (T). Internal factors that can opportunities may give the company
be considered as either strengths or competitive advantage. The key to
weaknesses include: the experience strategic fit is to make sure that the
and expertise of management; the company’s internal and external
skill of a work force; product quality; environments match: its internal
the company’s financial health; and strengths must be aligned with the If you go exactly where
the strength of its brand. External external opportunities. Any internal your competitors are,
factors that might be opportunities weaknesses should be addressed you’re dead.
or threats include market growth; so as to minimize the extent of Thorsten Heins
new technologies; barriers to external threat.
German-Canadian former CEO
entering markets; overseas sales When undertaking a SWOT
of Blackberry (1957–)
potential; and changing customer analysis, the views of staff and
demographics and preferences. even customers can be included—
SWOT analysis is widely used it should provide an opportunity to
by businesses of all types, and it is solicit views from all stakeholders.
a staple of business management The greater the number of views