SWOT matrix

Abstract

The SWOT matrix is a tool for making an objective analysis of any given company. SWOT is an Acronym for Strengths, Weaknesses, Opportunities, Threats. These are the main areas to be analyzed and researched, to get an overview of what the company is good at, not good at, which threats lies ahead, and what opportunities does the company have. The four Areas can be broken up into positive and negative, where strengths and opportunities are positive and weaknesses and threats are negative. The purpose of SWOT matrix is to get the data, and get some ideas out of it and in the end develop some great goal statements.

Introduction

The tool that frequently comes up in the business environment and which a lot of different businesses actually use is what we call a SWOT matrix or SWOTanalysis. SWOT is acronym for strengths, weaknesses, opportunities and threats. SWOT analysis is a tool that a company uses to complete and objective analysis of that particular company. You don't have to necessarily work for a particular company, to obviously conduct a SWOT analysis but there are a lot of different benefits. First thing, there are four different quadrants or four different areas that businesses, have to complete an analysis in, which means they have to do a little bit of research and find out what are some of the things they're good at and some of the things they’re not so good at. The way this SWOT analysis is broken up, is that there are categories that are considered to be internal and there are categories that are considered to be external. Something that is internal is something that the firm or the company has control over. They typically have some effect on what goes on in the internal environment and those are actually strengths as well as weaknesses. Those are considered to be internal factors, because the company usually has some control over what they're good at and what they are not so good at.

Strengths

Strength is something that the company does, that provides itself a competitive advantage. Something that they do, that no other company, is better at than them and this is the thing, that the company is known for.

Example

Very low cost, Walmart

For example a company like Walmart one of their largest strengths is the fact that they can maintain a very low cost, which allows them to price their products much lower than a lot of their competitors can, because they have the ability to keep their costs low and that has a lot to do with the fact that they're just so large of a corporation they can demand certain concessions from suppliers because they're purchasing such a large quantity of goods. That is a strength for Walmart of course.

Positive brand recognition

Positive brand recognition is another example of strength. Some companies are well known, you see the image and the logo and you instantly have positive feelings that evoke positive emotions regarding, a particular brand. Those types of companies merely have to put their logo on a particular product and people would buy it regardless, because they have strong brand recognition. They’re viewed positively, they’ve produced quality products and services before and of course that contributes, to strong brand recognition.

skilled workforce

Another example is a skilled workforce. A skilled workforce is a very significant strength because human resources in large part, is the greatest asset that most companies can have. Good quality skilled employees are very hard to come by and employers that can retain their workers and continually train them, can serve as a competitive advantage.