Strengths, Weaknesses, Opportunities and Threats abbreviated as SWOT is a formal process that businesses follow to evaluate their position relative to the market. They use what they discover under each category to form detailed business plans.
For example…
Take Angel’s cupcakes, they’ve invented a cupcake mix which can be cooked in a microwave oven, rather than a conventional oven. They conduct a SWOT analysis to see how they fare against competitors. Under Strengths, they establish that their product is the only one of its kind around. Under Weaknesses, they realise they don’t have the best tasting cupcakes. In terms of Opportunities, they find a partner who can improve their product’s taste. Threats research reveals that their fierce competitor is experimenting making similar microwavable cupcake mixes. This knowledge then helps Angel’s Cupcakes to create their business plan.
