A SWOT (strengths, weaknesses, opportunities, threats) analysis allows a company to evaluate its operations from an internal and external point of view. The company examines strengths and weaknesses internally. A strength may be an excellent order management process, while a weakness may be poor communication among departments. Opportunities and threats are external. An opportunity could be the ability to partner with a nonprofit organization, and a threat could be government regulation of the use of raw materials. IKEA is a home furnishings manufacturer that has conducted a SWOT analysis of its business operations.
IKEA has maintained long-term partnerships with its suppliers. This ensures that the company has access to high-quality materials at reasonable prices.
IKEA is a global company, so product standards may be difficult to maintain.
IKEA can further capitalize on the "green" movement and IKEA's customers' desire to have less of an impact on the environment.
The regulatory environments across the globe vary and can affect how IKEA does business and its product costs, especially the use of natural resources.
A SWOT is a simple analysis tool to construct. It is a four-square box with strengths and weaknesses at the top and opportunities and threats at the bottom.