SWOT Analysis

SWOT (strengths, weaknesses, opportunities, threats) analysis is the most commonly used framework for determining the strategic position of the business.

1. STRENGTHS or WEAKNESSES.
   1. Identify cash balances of the business. This is the key figure which should be known before considering any strategy.
   2. Ratio analysis could give you further indication on strengths and weaknesses of the business. Profitability, liquidity, working capital and gearing ratios can be used broadly. Discretionary cost such as marketing, research and development costs can be considered, perhaps in comparison with other figures such as turnover.
   3. Compliance with legislation is another useful point, look for compliance with health and safety legislation and employment legislation.
   4. Value chain analysis in either direction both horizontally and vertically. Indentify signs of delays, quality issues, availability of material and labor.
   5. Use other frameworks such as balance scorecard (financial, internal business, customer satisfaction, innovation and development perspectives) and Porter's five forces model (bargaining of suppliers and customers, threats from substitute products, barriers to entry and competition and rivalry).
   6. Management and employees' knowledge, skill, experience and morale.
      
       
2. OPPUTUNITIES OR THREATS
   1. Identify any suggestions givens by stakeholders either inside or outside the business.
   2. Identify any government policy, how it will impact the business.
   3. Identify projects under consideration.
   4. Porter's five forces model and Value chain analysis mentioned above is also relevant here.
   5. Customers' Reactions whether opportunity for growth is present or otherwise (can also be used as strength).

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