Oct 25, 2019


SWOT Analysis (Explanation of Weakness, Strength, Opportunity and Threats)

Companies' objective is to improve the sales and profit of the organization. To improve that companies have to evaluate each and every aspect of the performance and overall evaluation of the company's strengths, weaknesses, opportunities, and threats are called SWOT Analysis.
In simple language it is the way of observing external and internal marketing environment 
Albert Humphrey was a management consultant at Stanford Research Institute in 1960-1970 he comes up with a method of planning which was named as Swot Analysis.


A company must observe the macroenvironmental forces(Demographic, Economic, Political, Ecological, Technological, Socio-cultural) and microenvironmental factors(Customers, Suppliers, Competitors, Shareholders, Employees, and Media) that affect its ability to earn the profit.

A company must assign some intelligence team which will observe the trends, important development requirements, and related threats and opportunities.


As per the Need of Buyers and Intrest company has higher chances of making a profit that is called opportunity there are three sources of marketing opportunity.

  • Offer something which is in shorter supply. (eg. Xiaomi's flash sale)
  • Supply the same product or service in a new way. (eg. Suzuki Nexa)
  • Introduce the new product or service. (eg. Amazon prime)

Marketing managers must be very good at spotting opportunities and to evaluate the opportunities present in the company managers can use the method called as market opportunity analysis(MOA) to ask questions like this:
  • Can we locate the targeted market(s) and reach that with minimum investment?
  • Do we have all the resources to benefits the customer?
  • Can we deliver benefits better than competitors?
  • How is return on investment(ROI)?


The threat is an unexpected change in the demand of the customers and a change of trends that would lead to lower sales and profit. An organization must practice some exercise to adapt to the changes in demand and wants of the customers.


Business need to evaluate its strengths and weaknesses on a regular basis where weaknesses are the opportunities to improve and strengths are to take advantage of that ability.

You can understand better with these examples.
  • Dell strength was selling its hardware efficiently and effectively to its customers better than its competitors like IBM and Compaq.
  • Dell weakness was its brand was not that strong and it didn't have strong relationships with the dealers.
  • Dell opportunity is they provided assembling facilities to customers once they understand the market is becoming more sophisticated.
  • Dell threat is it failed to generate a strong customer base.


Bussiness can Evaluate its own strength and weaknesses and it's not necessary to correct the weaknesses nor be overconfident on its strength.

the big question is that, what should they do then?
answer for that is, An organization must consider all the aspects and do analysis like SWOT analysis and try to make new strengths along with a reduction in the number of weaknesses they have.

That's the reason this kind of Strategies is been taught in Marketing, MBA and Bussiness studies which help the managers to found the critical points in a company to overcome and perform better. 

Thanks for reading and mention one learning from the above article in the comment section.


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