Environment influence is a part of SWOT analysis. SWOT is acronym of strengths, weakness, opportunity and threats. Threats and opportunities come under the purview of the external environment of the business. Strengths and weakness come under the purview of the internal environment of the business.
These factors termed as SWOT are outlined as below:
• Strengths
• Weakness
• Opportunity
• Threats
S - Strength of SWOT analysis
Strength is an inherent resource capability of the organization or company which can be used to gain strategic advantages from their competitors in the market. For example, strength is skill required for research and innovation which helps in the development of advance skills which can be then used for getting a new product, a new material, and a new customer. In this way we achieve to gain competitive strengths in the business.
W - Weakness of SWOT analysis
A weakness is an inherent limitation or constraint or problem of the organization. It creates strategic disadvantages to the company or organization. For example, a manufacturing company’s over-dependency on a single supplier in the market can be potentially risky for the company at the time of crisis.
O - Opportunity of SWOT analysis
An opportunity is a favorable condition in the business organization's environment which enables it to consolidate the resource and strengthen its position. For example, increase in the products and services of the company due to the demands from the customer. It is the best opportunity for the company to serve products and services to their customers.
T - Threat of SWOT analysis
A threat is an unfavorable condition in the business organization’s environment which causes a risk for, or damage, the organization. For example, an emerging strong competitor in the market who is likely to offer stiff competition to the existing companies in the industry, trade and business. This is one of the threats to the organization.