threatS :
Changes in the external environmental also may present threats to the firm.
Some examples of such threats include:
- a new competitor in your home market
- price wars with competitors
- shifts in consumer tastes away from the firm's products.
- new regulations.
- increased trade barriers.
- a competitor has a new, innovative product or service
- competitors have superior access to channels of distribution
- taxation is introduced on your product or service
Many of these factors could appear listed in several categories. For example, if one's competitors initiate an alliance, this comprises a threat. If one becomes part of such an alliance, this could become an opportunity. If an existing alliance causes problems in a supply chain, one diagnoses a weakness. If one's alliances offer a competitive advantage, this indicates a strength.
SWOT analysis can help in turning weaknesses and threats into opportunities, and ultimately into strengths. The exercise can also identify opportunities that will address weaknesses, and strengths that will counter threats.
Why use a SWOT Analysis?
In any business, it is imperative that the business be its own worst critic. A SWOT analysis forces an objective analysis of a company's position vis a vis its competitors and the marketplace. Simultaneously, an effective SWOT analysis will help determine in which areas a company is succeeding, allowing it to allocate resources in such a way as to maintain any dominant positions it may have.
In any business, it is imperative that the business be its own worst critic. A SWOT analysis forces an objective analysis of a company's position vis a vis its competitors and the marketplace. Simultaneously, an effective SWOT analysis will help determine in which areas a company is succeeding, allowing it to allocate resources in such a way as to maintain any dominant positions it may have.
The swot matrix
A firm should not necessarily pursue the more lucrative opportunities.
Rather, it may have a better chance at developing a competitive advantage by
identifying a fit between the firm's strengths and upcoming opportunities. In
some cases, the firm can overcome a weakness in order to prepare itself to
pursue a compelling opportunity . To develop strategies that take into account the SWOT profile, a matrix of
these factors can be constructed. The SWOT matrix (also known as a TOWS
Matrix) is shown below:
| | strengths: | weaknesses: |
| opportunitIES: | s-o strategies | w-o strategies |
| threatS : | s-t strategies | w-t strategies |
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