SWOT Analysis for an IT Company

by Wendel Clark; Updated September 26, 2017

The information technology industry is characterized by regular change and innovation. IT firms that do not understand their positions in the market will be hard-pressed to benefit from these changes and risk losing ground to better-prepared firms. An excellent way for an IT firm to evaluate its market position is through an analysis of its strengths, weaknesses, opportunities and threats -- commonly known as a SWOT analysis.

Strengths

The strengths of an IT firm are all its internal attributes that it can use in order to gain an advantage in the marketplace. An example of a strength might be having highly skilled IT workers that know the needs of local IT customers. An IT firm should focus on its strengths and attempt to use them to counteract any firm weaknesses.

Weaknesses

A weakness is an internal characteristic that has the potential to hold a business back or to prevent it from achieving a competitive advantage. Essentially, a weakness is the opposite of a strength. A common weakness in IT firms is having employees who are highly skilled in the technical components of their jobs, but who lack the social or business skills that are needed to fully perform their duties. By addressing a weakness an IT firm can, however, improve it and convert it into a strength; for example by providing business training to IT workers in order to make them more well-rounded employees.

Opportunities

Opportunities are external situations that present a firm with possibilities for growth or improvement. In the IT industry, opportunities are often born out of technological change. For example, the meteoric rise of the Internet in the 1990s provided IT firms with opportunities to work with small- and medium-sized businesses that previously could not afford the IT infrastructure of large corporations. If a firm recognizes opportunities it is possible for it to exploit them using its internal strengths.

Threats

A threat to a business is an outside situation that has the potential to cause it harm. Just as technological changes can provide opportunities for an IT firm, they can also create threats. If a firm is not prepared for a technological change it can risk having its IT offerings become obsolete. It is important, therefore, that IT firms anticipate external threats so that they can react to them.

References

About the Author

Wendel Clark began writing in 2006, with work published in academic journals such as "Babel" and "The Podium." He has worked in the field of management and is completing his master's degree in strategic management.

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