The SWOT analysis combines the strengths and weaknesses analysis with the trends and prospects analysis. In this respect, it identifies strengths, weaknesses, opportunities and threats.
An Example SWOT Analysis
A Limo AG SWOT Analysis
In the following it is demonstrated by an example of a fictitious company how the SWOT analysis is carried out to identify possible characteristics of strengths, weaknesses, opportunities and threats.
An example Limo AG company is a market leader among the soft drinks manufacturers in Germany. It produces and distributes different types of soft drinks. Its huge factory is located in Münsterland.
- Strengths: In the last few years, Limo AG has managed to establish financial reserves, therefore being able to respond during times of need or in case of downturn in demand. The company should continue to increase its reserves to the extent possible in order to ensure optimal protection. Moreover, it shows good results in binding its own customers who are able to easier forgive small company’s mistakes. This allows creating a loyal customer base that the company can use even in tough times.
- Weaknesses: High soft drinks production costs are still to be perceived as the weak point of Limo AG. The reason for the situation is the necessity of transposing the machines used for the production of different types of soft drinks. In addition, transposing the machines requires a considerable amount of time. Due to the enormous effort, the company considers their closing in the future.
- Opportunities: New markets in Europe and Asia offer the opportunities for Limo AG that strives to expand internationally. Besides domestic market, Germany’s neighbouring countries are to be considered as potential sales markets. Standing out from the competition would be also desirable. An entirely new product could potentially increase the company’s competitive advantage.
- Threats: Limo AG has to take into account possible external risks arising from political unrest or war to name but a few. Moreover, a new competitor in the market could be a threat for Limo AG by stealing market share or even putting its leader’s position at risk. In addition, tightening of the environmental protection measures e.g. in form of filter systems or the like should be recognised as a risk-laden cost factor.
This example SWOT analysis has been created by means of our SWOT analysis Excel template.
To sum up, it can be said that the SWOT analysis result for Limo AG is partially good. However, this example company should take into account external risks, which can bring it into difficulties. Therefore, it should take every opportunity to strengthen and fully expand its market position, thereby becoming more resistant to adverse influences.