Introduction
SWOT analysis is a useful method of summaries all the
information generated during the export planning. SWOT stands for strengths,
weakness, opportunities and threats, which helps to isolate the strong and week
areas within an export strategy. SWOT also indicates the future opportunities or
threats that may exist in the chosen markets and is instrumental in strategy
formulation and selection.
To apply your own SWOT analysis, start by creating a
heading for each category – ‘Strengths’, ‘Weaknesses’, ‘Opportunities’, and
‘Threats’. Under each of these, write a list of five relevant aspects of your
business and external market environment. Strengths and weaknesses apply to
internal aspects of your business; opportunities and threats relate to external
research.
Your final analysis should help you develop short and long
term business goals and action plans, and help guide your market selection
process.
Environmental factors internal to the company can be
classified as strengths or weaknesses, and those external to the company can be
classified as opportunities or threats.
Strengths
Business strengths are its resources and capabilities that
can be used as a basis for developing a competitive-advantage. Examples of such
strengths include:
- Patents
- Strong brand names.
- Good reputation among customers.
- Cost advantages from proprietary know-how.
- Exclusive access to high grade natural resources.
- Favorable access to distribution networks.
Weaknesses
The absence of certain strengths may be viewed as a weakness. For example, each
of the following may be considered weaknesses:
- Lack of patent protection.
- A weak brand name.
- Poor reputation among customers.
- High cost structure.
- Lack of access to the best natural resources.
- Lack of access to key distribution channels.
Opportunities
The external environmental analysis may reveal certain new opportunities for
profit and growth. Some examples of such opportunities include:
-
An unfulfilled customer need.
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Arrival of new technologies.
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Loosening of regulations.
-
Removal of international trade barriers.
Threats
Changes in the external environmental also may present threats to the firm. Some
examples of such threats include:
Successful SWOT
Analysis
Simple rules for successful SWOT analysis:
-
Be realistic about the strengths and weaknesses of the
organization.
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Analysis should distinguish between where the
organization is today, and where it could be in the future.
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Be specific.
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Always analyse in relation to your competition i.e.
better than or worse than your competition.
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Keep your SWOT short and simple.
A SWOT analysis can be very subjective, and is an excellent
tool for indicating the negative factors first in order to turn them into
positive factors.
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