What are the differences between the internal and external factors associated with the SWOT analysis?

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S.L. Watson eNotes educator | Certified Educator

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When conducting a SWOT analysis as a tool to shape a company's business strategy, the internal factors of a business are its Strengths and Weaknesses. The external factors in the acronym are Opportunities and Threats.

Strengths and weaknesses can be controlled by the company, and it is a self-evaluation tool. Strengths include what a business does well and what gives the business the edge over competitors. Weaknesses also must be evaluated. Weaknesses could include such things as poor time management or goods that are not profitable. By assessing weaknesses, the company can improve in areas that are...

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krishna-agrawala | Student

the term SWOT is an acronym formed from first letters of four words - strengths, weaknesses, opportunities and threats. This term is used for an analytical technique involving identification and analysis of strengths, weaknesses opportunities and threats for a firm to help the firm formulate its strategy.

The four factors of the swot analysis consist of two factors that are internal to the firm engages in the strategic planning process. These are strengths and weaknesses of the firm. The other two factors, that is, strengths and weaknesses, are environmental factors. They represent some characteristics of the environment faced by the company rather than the characteristics of the company it self.

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giorgiana1976 | Student

SWOT analysis (Strength-Weakness-Opportunity-Threat) is actually a technique that can identify strengths and weaknesses and there could be examined opportunities and threats of a project, or of an action, or of an individual.

Generally, there are two ways that SWOT analysis can be used: for business or for personal reasons. For personal reason, SWOT analysis can be used to monitor a person's career, noting the skills and the problems the person has. In the professional context, SWOT analysis can be used to measure the profitability of a business or project.

If SWOT analysis is made for a company,the first two acronyms (S.W.) concern the company and reflects it's position, and the last two (O.T.) concern  the environment and reflect it's impact on activity of the company analyzed.

Strengths of a company are characteristics or distinguishing skills that it possesses at a higher level, compared with other companies, especially competitors, which assures it a certain advantage.

The weaknesses of the company are its characteristics that determine a performance level below of those of competitors.

Opportunities are positive external environmental factors for the company, ie chances offered by environment, to the firm, to establish a new strategy or to reconsider the existing strategy, in order to exploit arising profitable opportunities.

Threats are negative external environmental factors for the firm, ie situations or events which may affect adversely, in significant measure, the firm capacity to fully achieve the set targets, the result being the drop of its financial and economical performances. 

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