SWOT Analysis Example

In SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, the analyst first looks into the business unit to identify its strengths and weaknesses. The analyst then reviews the environment in which the business unit operates and identifies opportunities presented by that environment and the threats posed by that environment. The following lists show questions that an analyst would ask in conducting a SWOT analysis.

Strengths

What does the company do well?

Is the company strong in its market?

Does the company have a strong sense of purpose and the culture to support the purpose?

Weaknesses

What does the company do poorly?

What problems could be avoided?

Does the company have serious financial liabilities?

Opportunities

Are industry trends moving upward?

Do new markets exist for the company’s products/ services?

Are there new technologies that the company can exploit?

Threats

What are competitors doing well?

What obstacles does the company face?

Are there troubling changes in the company’s business environment (technologies, laws, and regulations)?

The following case study demonstrates how SWOT can be used to create a strong business strategy.

Case Study

In the mid-1990s, Dell Computer used a SWOT analysis to create a strong business strategy that has helped it become a very strong competitor in its industry value chain. Dell identified its strengths in selling directly to customers and in designing its computers and other products to reduce manufacturing costs. It acknowledged the weakness of having no relationships with local computer dealers. Dell faced threats from competitors such as Compaq and IBM, both of which had much stronger brand names and reputations for quality at that time. Dell identified an opportunity by noting that its customers were becoming more knowledgeable about computers and could specify exactly what they wanted without having...