SWOT analysis stands for strength, weakness, opportunity, and the threat. The SWOT analysis is an analysis which is based on the assumption that an effective strategy is derived from internal resources (strength and weakness) and external (opportunity and threat).
Advantages of SWOT analysis is connected the internal and external factors to stimulate new strategy, therefore the planning based on the resources and competencies to enrich the SWOT analysis by developing a perspective internal (Dyson, 2002). This process involves the determination of the specific goals of the business venture or project and identifying the internal and external factors that support and that doesn’t support in achieving company goals.
The results of the SWOT analysis have been obtained, compared to maximize strength and opportunity (strategy SO) as well as minimize the weakness and the threat (WT strategies) in order to achieve an optimal strategy.
The SWOT analysis has several objectives to identify the key factors that come from the internal and external environment. SWOT analysis categorized as into two, namely: internal factors: strength and weakness is coming from the internal environment of the organization or business. External factors: is the opportunity and threat coming from external organizations or business environment. To identify these factors, can use PEST analysis.
SWOT analysis may be applied by means of analyzing and sorting out the various things that affect all four factors, then apply it in the image of the SWOT matrix, where its application is how strength (strengths) are able to take advantage of opportunities that exist, how do I address the industry which prevents the advantages of opportunities (opportunities), and how the power (strengths) are able to face the threats There is, and how the latter is how to overcome the weakness of industry are able to make threats be a real or created a new threat.
The SWOT analysis has 4 quadrants, namely as follows:
- Quadrant I: the situation Is very favorable. The company has opportunities and power so that it can capitalize on the opportunities that exist. The strategy should be applied in this case is supportive of an aggressive growth policy. (Growth oriented strategy).
- Quadrant II: while facing the threat, the company still has strength in terms of internal. Strategies that should be applied is to use power to take advantage of long-term opportunities by means of a strategy of diversification (products/services).
- Quadrant III: companies face a huge market opportunity, but on the other hand, he faced some constraints/weaknesses internally. The focus of the company is to minimize the internal problems of the company so that it can seize the market opportunities are better.
- Quadrant IV: this is a very unfortunate situation, the company faces a variety of threats and internal weaknesses.
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