SWOT analysis is the acronym of Strength, weakness, opportunity and threat, which is beneficial to make the competitive strategies for an organization. SWOT analysis is termed as a tool, which is used to perform the internal and external analysis of a firm. The analysis of strengths and weaknesses comes under the internal analysis in which the internal strengths and weaknesses of the firm are analyzed.
The strengths are analyzed in terms of the aspects, which are contributing in the competitive advantage of the firm such as strong financial condition, effective distribution channel, etc. Strengths of the firm help to be competitive in the market by facilitating a competitive advantage over the competitors.
On the other hand, weaknesses show the aspects, which may influence the competitive advantage of a firm negatively such as less effective marketing strategies, wrong market segmentation, etc. These help to evaluate the internal environment of the firm.
On the other hand, opportunities and threats are significant to analyze the external environment of the firm. These exist in the same manner for all the companies in the industry.
Opportunities are identified in the matters in which a business can achieve growth and development in the manner of market share, customer base or other aspect and can facilitate a competitive position in the industry. On the other hand, threats are identified in the industrial or environmental aspects, which can affect the operations or the position of the company in the industry.
Thus, the analysis of opportunities and threats is a marketing help that helps to determine the positive or negative aspects of the environment, which may influence the position of a firm in the industry.
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