What is the difference between weaknesses and threats in a swot

For startups, a SWOT analysis is part of the business planning process. One or two hours should be more than plenty. Gather people from different parts of your company and make sure that you have representatives from every department and team. Doing a SWOT analysis is similar to brainstorming meetings, and there are right and wrong ways to run them.

I suggest giving everyone a pad of sticky-notes and have everyone quietly generate ideas on their own to start things off. This prevents groupthink and ensures that all voices are heard. After five to 10 minutes of private brainstorming, put all the sticky-notes up on the wall and group similar ideas together. Sticky dots in different colors are useful for this portion of the exercise. Based on the voting exercise, you should have a prioritized list of ideas.

Of course, the list is now up for discussion and debate, and someone in the room should be able to make the final call on the priority. This is usually the CEO, but it could be delegated to someone else in charge of business strategy.

These questions can help explain each section and spark creative thinking. Strengths are internal, positive attributes of your company. These are things that are within your control. Weaknesses are negative factors that detract from your strengths. These are things that you might need to improve on to be competitive. Opportunities are external factors in your business environment that are likely to contribute to your success.

Threats are external factors that you have no control over. Make decisions about the best path for your initiative. Identifying your opportunities for success in context of threats to success can clarify directions and choices.

Determine where change is possible. If you are at a juncture or turning point, an inventory of your strengths and weaknesses can reveal priorities as well as possibilities. Adjust and refine plans mid-course. A new opportunity might open wider avenues, while a new threat could close a path that once existed. What are the elements of a SWOT analysis?

Internal External Strengths Weaknesses Opportunities Threats If a looser structure helps you brainstorm, you can group positives and negatives to think broadly about your organization and its external environment.

General areas to consider: Human resources - staff, volunteers, board members, target population Physical resources - your location, building, equipment Financial - grants, funding agencies, other sources of income Activities and processes - programs you run, systems you employ Past experiences - building blocks for learning and success, your reputation in the community Don't be too modest when listing your strengths.

Forces and facts that your group does not control include: Future trends in your field or the culture The economy - local, national, or international Funding sources - foundations, donors, legislatures Demographics - changes in the age, race, gender, culture of those you serve or in your area The physical environment Is your building in a growing part of town? Is the bus company cutting routes? Legislation Do new federal requirements make your job harder Who develops the SWOT?

But don't overlook anyone in the creation stage! When and where do you develop a SWOT analysis? How do you develop a SWOT analysis? Steps for conducting a SWOT analysis: Designate a leader or group facilitator who has good listening and group process skills, and who can keep things moving and on track.

Designate a recorder to back up the leader if your group is large. Use newsprint on a flip chart or a large board to record the analysis and discussion points. You can record later in a more polished fashion to share with stakeholders and to update. Introduce the SWOT method and its purpose in your organization. This can be as simple as asking, "Where are we, where can we go? Depending on the nature of your group and the time available, let all participants introduce themselves.

Then divide your stakeholders into smaller groups. If your retreat or meeting draws several groups of stakeholders together, make sure you mix the small groups to get a range of perspectives, and give them a chance to introduce themselves. The size of these depends on the size of your entire group — breakout groups can range from three to ten.

If the size gets much larger, some members may not participate. Have each group designate a recorder, and provide each with newsprint or dry -erase board. Direct them to create a SWOT analysis in the format you choose-a chart, columns, a matrix, or even a page for each quality. Give the groups minutes to brainstorm and fill out their own strengths, weakness, opportunities and threats chart for your program, initiative or effort. Encourage them not to rule out any ideas at this stage, or the next.

Remind groups that the way to have a good idea is to have lots of ideas. Refinement can come later. In this way, the SWOT analysis also supports valuable discussion within your group or organization as you honestly assess. Of note: Many people get confused about the difference between strengths and opportunities, as well as the difference between weaknesses and threats. Even though these are internal questions, analysis to the identified strengths and weaknesses should be done with a market orientation and customer focus because:.

If you want to check out more about internal analysis, please feel free to browse this free chapter on internal analysis from the recently re-released Strategic Planning Kit for Dummies , written by our Chief Operating Officer Erica Olsen. Strategy implies being ready for the future, which can sound a bit daunting. Putting an actionable plan together may even seem impossible to accomplish given the unpredictability of time. Yet the truth is that the simplest strategies see the most sustainable success.

Using a SWOT analysis helps make framing your strategy much less complicated. It offers a categorical way to capture present and anticipated conditions that matter. In our last newsletter we talked a bit about the importance of recognizing your internal Strengths and Weaknesses for strategic planning. Opportunities refer to favorable conditions that if acted upon properly could produce rewards.

Threats refer to conditions or barriers that may prevent desired achievement. The way to differentiate between a strength or weakness internal states from an opportunity or threat external states is to ask: Would this issue exist if the company did not exist? They are areas where the business needs to improve to remain competitive: a weak brand, higher-than-average turnover, high levels of debt, an inadequate supply chain, or lack of capital.

Opportunities refer to favorable external factors that could give an organization a competitive advantage. For example, if a country cuts tariffs, a car manufacturer can export its cars into a new market, increasing sales and market share.

Threats refer to factors that have the potential to harm an organization. For example, a drought is a threat to a wheat-producing company, as it may destroy or reduce the crop yield. Other common threats include things like rising costs for materials, increasing competition, tight labor supply.

What occurs within the company serves as a great source of information for the strengths and weaknesses categories of the SWOT analysis. Examples of internal factors include financial and human resources, tangible and intangible brand name assets, and operational efficiencies.

Potential questions to list internal factors are:. What happens outside of the company is equally as important to the success of a company as internal factors. External influences, such as monetary policies, market changes, and access to suppliers, are categories to pull from to create a list of opportunities and weaknesses. Potential questions to list external factors are:. Use a SWOT analysis to identify challenges affecting your business and opportunities that can enhance it.

However, note that it is one of many techniques, not a prescription. However, it also noted weaknesses and threats such as foreign currency fluctuations, growing public interest in "healthy" beverages, and competition from healthy beverage providers. Its SWOT analysis prompted Value Line to pose some tough questions about Coca-Cola's strategy, but also to note that the company "will probably remain a top-tier beverage provider" that offered conservative investors "a reliable source of income and a bit of capital gains exposure.

To get a better picture of a SWOT analysis, consider the example of a fictitious organic smoothie company. To better understand how it competes within the smoothie market and what it can do better, it conducted a SWOT analysis. Through this analysis, it identified that its strengths were good sourcing of ingredients, personalized customer service, and a strong relationship with suppliers.

Peering within its operations, it identified a few areas of weakness: little product diversification, high turnover rates, and outdated equipment. Examining how the external environment affects its business, it identified opportunities in emerging technology, untapped demographics, and a culture shift towards healthy living. It also found threats, such as a winter freeze damaging crops, a global pandemic, and kinks in the supply chain.

In conjunction with other planning techniques, the company used the SWOT analysis to leverage its strengths and external opportunities to eliminate threats and strengthen areas where it is weak. SWOT strengths, weaknesses, opportunities, and threats analysis is a method for identifying and analyzing internal strengths and weaknesses and external opportunities and threats that shape current and future operations and help develop strategic goals.

SWOT analyses are not limited to companies. Individuals can also use SWOT analysis to engage in constructive introspection and form personal improvement goals. Home Depot conducted a SWOT analysis, creating a balanced list of its internal advantages and disadvantages and external factors threatening its market position and growth strategy.

High-quality customer service, strong brand recognition, and positive relationships with suppliers were some of its notable strengths; whereas, a constricted supply chain, interdependence on the U. Closely related to its weaknesses, Home Depot's threats were the presence of close rivals, available substitutes, and the condition of the U.

It found from this study and other analysis that expanding its supply chain and global footprint would be key to its growth. Creating a SWOT analysis involves identifying and analyzing the strengths, weaknesses, opportunities, and threats of a company.

It is recommended to first create a list of questions to answer for each element. The questions serve as a guide for completing the SWOT analysis and creating a balanced list.

The SWOT framework can be constructed in list format, as free text, or, most commonly, as a 4-cell table, with quadrants dedicated to each element.