LibGuides: Country, Company and Industry Research: SWOT analysis

SWOT Analysis

A SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) is a micro level analysis of a company's competitive position. It assess internal and external factors and is used to develop strategic planning. Unlike a PESTLE Analysis, which is a macro evaluation of an entire country or industry, a SWOT Analysis focuses on a particular company.

Why SWOT?

A SWOT analysis can be used to analyse an entire business, or it can be used to focus on a couple of key issues or aspect's of a business model.

A SWOT analysis can help a business to create or update a business plan, whether to introduce a new product to the market, or be part of regular strategic planning.

For business students, a SWOT analysis can be a way of understanding the way a company or business operates and to get a better picture of how it fits into the wider market sector. Remember, SWOT is not the finished product - it's a tool to be used to understand a company or business environment. It does not produce solutions and the findings must be actioned to produce meaningful results!

SWOT factors

When considering a company's strengths, you might consider things such as:

What does the company do well?
What is unique about this company?
What positive feedback have they received?
What qualities separate them from their competitors?
Do they have any tangible assets or internal resources such as particularly skilled staff?

If you are conducting an analysis on a company you are not a part of, some of this information may be difficult to find. Consider looking at company profiles or annual reports for more information.

Weaknesses

The second part of a SWOT analysis is looking at weaknesses. These are areas where the company could improve. Some things you could consider are:

Things the company lacks
Things the company's competitors do better
Limitations on resources
Unclear marketing or lack of clarity around what they offer and what sets them apart from other companies in this market
Negative customer feedback
Lacking knowledge or resources

Explore annual or company reports to find information on the company's processes. The company's webpage is a good source of information on how they are selling themselves compared to their competitors. Industry research can provide insights into what other companies in similar market sectors are doing differently.

Opportunities

Opportunities are areas in which a company has the chance to expand or improve their services or products. This can include gaps in the market or chances to expand. Consider:

Are there any emerging trends this company could take advantage of?
Do they have any strengths that might attract potential partners?
Are there any adjacent markets they could tap into?
Are there geographic locations that are under-serviced in this market?

Consider doing industry research to locate gaps in the market and emerging trends, and consumer research to locate any relevant spaces where this company could potentially expand.

Threats

Threats are aspects of the company, the market, or its business model that have the potential to reduce or impact profits, or damage the reputation of the business. Threats can be tied to the company's weaknesses or to external forces that could impact the company's business model. Consider:

What is the competition doing? Are there areas where they are excelling that this company has not tapped into?
How could their weaknesses leave them vulnerable to market forces?
Are there any predicted market trends they are unprepared for?
What economic or political issues could impact this business?

Use the analysis of the company's weaknesses coupled with industry research to identify where the industry forces could negatively impact or build upon the company's weaknesses.