STEP 3—SWOT ANALYSIS
The SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis
provides a framework for you to compare your resources and capabilities to your
competitive environment. The SWOT is completed with the information collected
in the environmental scan.
In performing your SWOT analysis, you need to realistically identify significant
strengths and weaknesses (internal) and opportunities and threats (external).
Answer the following questions to complete your SWOT analysis:
POSITIVE
Opportunities
 What advantages do we have in
our market?
 Is there new technology that will
help us?
 Are population demographic
trends changing in our favor?
 What good opportunities are
facing us?
Threats
 What disadvantages do we have
in our market?
 What obstacles do we face?
 Is there new technology that will
hurt us or threaten our position?
 What are our competitors doing?
 Are there legislative/regulatory
changes that will impact us?
 Could any of our weaknesses
seriously threaten our business?
EXTERNAL
NEGATIVE
INTERNAL
Strengths
Weaknesses
 What advantages do we have in
 What disadvantages do we have
our group?
in our group?
 What do we do well?
 What could be improved?
 What relevant resources do we
 What do we do poorly?
have access to?
 What should we avoid?
 What do other people see as our
 What do other people see as our
strengths?
weaknesses?
Note: Think about your strengths and weaknesses in relation to your competitors. If all of your
competitors provide high quality products, then high quality products are not a strength—they
are a necessity in your market! Be realistic in admitting the “weakness” areas, but don’t
shortchange your strengths by being modest either!
Check to see if the flip side of any of your strengths needs to listed as a weakness. For
example, a high cost investment of equipment might be a strength in providing services, but the
same expensive piece of equipment could be a weakness if it has your resources tied up so that
you respond slower to changes in the strategic environment.
Look at using your strengths to open up opportunities. Think about the possibility of creating
opportunities by eliminating some of your weaknesses.
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