How to Prepare SWOT Analysis

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A SWOT analysis is prepared when evaluating the external and internal environments. The SWOT analysis contains the following categories: strengths, weaknesses, opportunities and threats. By preparing a matrix of these factors, a company can decide which direction to take the company.

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How to Design a SWOT Analysis

How to Conduct a SWOT

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The "S" in SWOT analysis stands for strengths. Identify the strengths of the company. This includes resources that give the company an obvious advantage. Some examples of strengths are an established reputation, brilliant talent, global distribution and expertise in a certain niche.
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The "W" in SWOT analysis stands for weaknesses. Identify the weaknesses of the company. Some obvious examples are inexperience, high operating costs and poor reputation.
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The "O" in SWOT analysis stands for opportunities. When identifying opportunities, look for potential enhancements, new potential clients or cost reductions.

The "T" in SWOT analysis stands for threats. Some potential threats that can be identified include declined interest in a particular product or service, increase in taxes and tighter regulations.
strength is something where a company has success or some peculiarity giving it the additional opportunities. Strength may consist of skills, a considerable experience, the valuable organizational resources or competitive opportunities, achievements, which gives a company its advantages in the market (for example, more qualitative goods, progressive technology, a fame of trademark). Power might also be a result of an alliance or joint-venture with a partner having an experience or potential opportunities for strengthening of the competitive capabilities of a company. The 10th International Conference RELIABILITY and STATISTICS in TRANSPORTATION and COMMUNICATION -2010 265 weakness is an absence of something important for operation of a company, something, that it cannot manage to do (in comparison with others) or something that puts it in the unfavourable conditions. Weakness may consist in a low qualification of employees, deficit of patents, low technological level, unfavourable geographical position etc. Depending on its importance for a competitive struggle it may make a company to be weak. opportunities are determined as something that gives a company a chance to do something new: to issue a new product, to gain new customers, to implement new technology etc. Opportunities may consist in, for example, leaving the market by a competitor, appearance of a large number of new consumers, construction of a highway next to an enterprise and etc. threat is something that may cause damage to a company, to deprive its considerable advantages. Threats may consist in the illegal copying of the unique elaborations of a company, appearance of new competitors or goods-substitutes and etc. For performance of the SWOT-analysis a table is done where, resulting from the selected mission

and strategic purposes of a company, main opportunities, threats, weak and strong sides of a company are enlisted, and , then, probable results of their interactions are identified. At the intersection of blocks four fields are formed: S&O (Strength and Opportunity); S&T (Strength and Threats)); W&O (Weakness and Opportunity); W&T (Weakness & Threats). In each field the pair combinations that must be taken into account during the working out of a strategy are selected. For example, in relation to pairs from the S&O field a strategy should use weak sides of an organization for obtaining a maximum outcome from opportunities given by the environment. For pair from the S&T field a strategy should foresee a use of strong sides of an organization for avoidance of threats and so on. Actually, fields of intersections (S&O, S&T, W&O and W&T) represent sets of possible scenarios of the development of events. The S&O pair may become a real scenario of the development of events favourable for an organization, but, only if the realization of the named strong side in view of opportunities of the environment will be strengthen in a strategy and accepted as one of the goals (tasks) of an organization. Selecting a strategy, one should remember that opportunities and threats may transform to their opposites. So, the unused opportunity may become a threat if it is used by a competitor. In Table 2 the factors of the outer and inner environment typical for Company are revealed.

Table 2. SWOT-analysis of Company Strong potential inner sides of company Weak potential inner sides of company 1) sale of exclusive insurance products 2) individual approach to customers 3) opportunities to react more operatively on

changes of environment (in comparison with foreign competitors) 4) more qualitative after sale service 1) absence of marketing department 2) high level of insurance receivables 3) insufficient stimulation of labour activity 4) insufficient level of employees` professionalism and service quality is not being improved Outer potential opportunities for company Outer potential threats for company 1) use of more efficient advertising campaign and establishing of feedback for companys image improvement and attraction of new customers 2) integration with some competitors for defending national companies from intervention 3) expansion of activity in the neighbouring countries and entrance to the market of the Western Europe 1) loss of a part of the market share due to dumping activity of competitors with foreign capital 2) worsening of a companys image as a result of propaganda 3) complication of work with intermediate parties

in connection with new requirements of the insurance legislation and absence of the interested of reinsurance companies to cooperation with Company ---------

Strengths
Offering a variety of insurance products, such as auto, liability, life and health, that appeal to a variety of target markets is a strength. If you're increasing insurance rates and customers are willing to pay the costs, that means higher commissions for you, making the business more lucrative. Existing customers are a strength since you receive recurring revenue from their payments. If youve been in business for years and have built a solid reputation in your local community, this is strength. Building and maintaining strong relationships with the insurance companies you represent is another strength.

Weaknesses
If you rely on paper transactions instead of digital solutions, you may look old-fashioned and out of the loop when it comes to selling policies, collecting payments and reminding people their payments are due.Without effective processes in place for handling accounting, marketing and day-to-day operations, your business may face crises that affect your profitability. A singular focus on servicing the same clients rather than finding new customers who need insurance is a weakness, since you are not increasing your customer base and face problems if clients switch to a competing broker. Related Reading: SWOT Analysis Vs. Gap Analysis

Opportunities
Selling supplemental products gives you an opportunity to increase your profits. Using email and the Internet to conduct business means you can reach more people who need insurance while saving money on processing and marketing costs. Providing services as an insurance consultant, in addition to selling policies, is a way to increase income and become a trusted source for recommending policy coverage. Being proactive in using marketing to recommend products based on customer profiles, such as suggesting boat insurance or supplemental policies, gives you a way to grow your business. Networking and building relationships with other businesses, such as accounting and legal firms, provides an opportunity to seek referrals to businesses and consumers needing insurance policies.

Threats
Local competitors selling similar policies, as well as banks and Internet brokers, present a threat to your bottom line. As insurance rates increase, some people may move their policies to other insurance agencies, another threat to your profitability. The ease of getting into the insurance business is a threat since it encourages new competition. Changing laws about healthcare may require quick adjustments in the way you offer policies, a threat if your firm is unable to keep up with the changing market and laws.

SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing Acme Insurance.

Strengths

Well trained staff. In-depth knowledge of the industry. Comprehensive customer insight.

Weaknesses

A limited number of people inhabiting Smalltown. The high costs of switching current insurance consumers from a competing firm to Acme. The struggle to stay ahead on the technological adoption curve in a small, rural community.

Opportunities

Participation within a growth industry. Increased sales through an expansion of the current service offerings. As the company continues to grow, the ability to decrease fixed costs over a growing customer base.

Threats

Competition from local brokerages that respond to Acme's superior offerings. A significant slump in the economy that will likely have a correlated effect on the industry. A single of series of huge, unexpected, traumatic events that put significant strain on the financial health of the insurance industry as a whole.

SWOT Analysis Examples

By Alison Job on December 21, 2012

Seeing how a SWOT analysis can be implemented in a variety of ways is useful when you are busy with your business plan research and preparation; here are some SWOT analysisexamples illustrating how this approach can be tailored to suit pretty much all areas of your business.

SWOT analysis examples for all areas of business

Companies can use SWOT analysis for business planning, strategic planning,competitor evaluation, marketing, business and product development and research reports. There are several configurations that a SWOT analysis can take; below are examples of various approaches to SWOT analysis.

Benefits of SWOT analysis

SWOT analysis can provide: A framework for identifying and analysing strengths, weaknesses, opportunities and threats A way to analyse a situation and develop suitable strategies A basis for assessing core capabilities and competencies The evidence for change.

SWOT Analysis Examples: Sales SWOT

Strengths: You need to understand what your sales team is good at. 1. What does your team do better than anyone else? 2. What benefits do your customers get from working with you? 3. What does your product or solution offer that your competitors cant? 4. Do you have unique processes, products, or services that set you apart? The aim is to identify your unique selling proposition and capitalise on that. Weaknesses: Every sales team has weaknesses. By identifying these you can find ways to strengthen them. 1. What does the competition see as your biggest weakness? 2. What do your customers regard as a weakness in your sales methods, product or service? 3. When you lose a sale, why did it happen? Opportunities: Opportunity is all around us, but is easily overlooked. 1. What do you see as a good opportunity that will strengthen your business?

2. In what segment of your market are clients consistently making purchases? 3. What high margin products or services can you expose to a broader market? 4. Have you noticed a change you can exploit in your market? 5. Is there a market you can enter with greater profits potential? Threats. These can have a huge impact on your business. You have to understand where danger exists in the marketplace. 1. Does more that 25% of your sales revenue come from less than 10% of your customer base? 2. What recurring challenges do your sales people face? 3. Is there a competitor that consistently beats you in the marketplace? 4. How much bad debt are you carrying 5. Are sales meeting expectations?

SWOT Analysis Examples: Marketing SWOT

You can perform a SWOT analysis as a way of deciding which marketing strategy to implement. Strengths. List the main strengths of your business and products or services. This should include not only the areas that your business or products are good at, but also high profit margins, successful current marketing campaigns and similar strengths. Weaknesses. List the main weaknesses of your business and products or services. This should include the areas that you feel your business could improve on. Opportunities. List the best opportunities available in your market, or new markets you believe your business can succeed in. Threats. List the biggest threats to your business. This could include competitors, government regulations, changes in customer attitudes and other such areas.

SWOT Analysis Examples: Business SWOT

An analysis of a companys internal strengths and weaknesses, compared to its external opportunities and threats, can offer insight into the state and potential of the business. Strengths. Describe the positive attributes, tangible and intangible, within your organisation. What do you do well? What resources do you have? What advantages do you have over your competition? Weaknesses. Identify the weaknesses within your business. These are factors that detract from your ability to obtain or maintain a competitive edge. Opportunities. Assess the factors that represent the reason for your business to exist and prosper. What opportunities exist in your market, from which you hope to benefit? Threats. What are potential threats to your business? You can benefit by having contingency plans to address them if they should occur.