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The strengths and weaknesses of a company relate to its internal elements such as resources, operational programs and departments such as sales, marketing and distribution.More specifically, a strength is an advantageous skill or competency that a business or project possesses that allows it to create competitive advantages, such as its strong researchand development capabilities. A weakness on the other hand is a strategic disadvantage such as a skill that the business or project lacks which limits it and creates potentialrisks in negative economic conditions.
An opportunity is a desirable condition which can be exploited to consolidate and strengthen a strategic position, such as growing demand for atrendy new product which it could consider selling. A threat on the other hand, is a condition that creates uncertainties which could potentially damage an organisation’sperformance and market share. Threats include the introduction of new competing products or services, foreign competition, technological advancements, and new regulations. Therefore, thecompany needs to develop strategies to overcome these threats in order to prevent the loss of its market share. It must be noted, however, that opportunities and threats exist inthe environment and therefore are often beyond the control of the organisation but they do offer suggestions for strategic direction. The SWOT analysis, as a result, demands a greatdeal of research into an organisation’s present and future position. Its results provide a useful source of information from which an organisation can go on to develop policies andpractices which allow it to “build upon its strengths, minimise its weaknesses, seize its opportunities” and make contingency plans or measures to cancel or reduce threats.