Strength, Weakness, Opportunity, Threat

Strength and weakness analysis is an internal company exercise to gauge your ability to compete effectively. Opportunity and threat analysis is an external exercise centered on competitors and the external environment that affect a company's ability to compete effectively. Taken together, they are referred to as SWOT analysis.

Each distribution channel alternative and sales force option carries specific costs that can be estimated in most industries and categories.

Small businesses need to network with potential or current customers, industry associations, trade suppliers, and competitors to help answer these questions. Key questions are:

Other considerations. In some categories of small business, other factors should be considered, such as:

For an example of how SWOT analysis might be conducted for a small service company, see our case study.