SWOT analysis

A scan of the internal and external environment of a farm

SWOT

• Internal factors– Strengths (S)

– Weaknesses (W)

• External factors– Opportunities (O)

– Threats (T)

SWOT Analysis

• Important for strategic planning

• helpful to match resources and capabilities to environment farm

• useful as basis for developing competitive advantage

SWOT Analysis Framework

S tren g th s W eakn esses

In te rn a l an a lys is

O p p ortu n it ies Th rea ts

E xte rn a l an a lys is

E n viron m en ta l scan

Strengths

• Skills

• knowledge

• resources

• good reputation

• accessibility

• good soils

• near main road

Weaknesses

• High costs• poor reputation• lack of access to e.g. markets• weak technical knowledge• poor quality inputs• plots not well located (slopes - difficult to

cultivate; bad soils)• insufficient irrigation/capacity of water

Opportunities

• Unfulfilled customer need

• Entry to new markets

• loosening of regulations

• removal of trade barriers

• extra funds - SAPARD

Threats

• New regulations

• political instability

• shifts in customer tastes away from farm’s products

• increased trade barriers

• more competition

• chain not well organized

SWOT Matrix

• Most lucrative opportunities not necessarily best pursuit

• identify best fit between strengths and opportunities

SWOT Matrix

Strengths Weaknesses

Opportunities S-O strategies W-O strategies

Threats S-T strategies W-T strategies

• S-O strategies pursue opportunities that are a good fit to the farm’s strengths

• W-O strategies overcome weaknesses to pursue opportunities

• S-T strategies identify ways that the farm can use its strengths to reduce its vulnerability to external threats

• W-T strategies to prevent the farm’s weaknesses from making it highly susceptible to external threats