The acronym for the components of a situation analysis (‘audit’) in marketing and business strategy: strengths, weaknesses, opportunities and threats. It is a very simple and, hence, useful framework for analysing the environment in which a firm is operating. Opportunities and threats are usually found in the external environment, whereas strengths and weaknesses usually exist within the firm. A meaningful SWOT analysis needs to involve far more than merely listing of factors. It is necessary to examine each one in depth to see what needs to be done in practical terms to deal with each factor. Above all, it is necessary to place all the factors under each heading in some order of priority. This will focus attention on the most important issues in each area. The weaknesses of the analysis include the time and cost of collecting accurate information and, potentially, the enormous list of factors.
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