SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) |
A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The generation of possible strategies is done by asking and answering the following four questions: How can we use each Strength? How can we stop each Weakness? How can we exploit each Opportunity? How can we defend against each Threat?
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