SWOT point Organizational Examples Individual Examples
Strenths Having high-levels of cash flow gives firms discretion to purchase new equipment if they wish to.
Strong technical and language skills, as well as previous work experience, can help individuals rise above the competition.
Weaknesses Dubious leadership and CEO scandals haveplagued some corporations in recent years. Poor communication skills keep many job seekers from being hired into sales and supervisory positions.
Opportunities The high cost of gasoline creates opportunities for substitute products based on alternative energy sources.
The U.S. economy is increasingly services based, suggesting that individuals can enjoy more opportunities in service firms.
Threats Concerns about worldwide pollution are athreat to petroleum-based products. A tight job market poses challenges to new graduates.
Five forces analysis examines the situation faced by the competitors in an industry. Strategic groups analysis narrows the focus by centering on subsets of these competitors whose strategies are similar. SWOT analysis takes an even narrower focus by centering on an individual firm. Specifically, SWOT analysis is a tool that considers a firm’s strengths and weaknesses along with the opportunities and threats that exist in the firm’s environment (Table 4.12 “SWOT”).
Executives using SWOT analysis compare these internal and external factors to generate ideas about how their firm might become more successful. In general, it is wise to focus on ideas that allow a firm to leverage its strengths, steer clear of or resolve its weaknesses, capitalize on opportunities, and protect itself against threats. For example, untapped overseas markets have presented potentially lucrative opportunities to Subway and other restaurant chains such as McDonald’s and Kentucky Fried Chicken. Meanwhile, Subway’s strengths include
a well-established brand name and a simple business format that can easily be adapted to other cultures