What’s the link between Porter’s 5 Forces Model and SWOT?
SWOT is one of the most commonly used businesses tool. Both the analyses in discussion can portray the strengths and weakness of your business. However, there are some major distinctions. The level of specificity, competition and time orientation are some of the striking differences.
SWOT (an acronym for Strengths, Weaknesses, Opportunities and Threats) can be described a more general and overall assessment. Typically, the Five Forces model focuses on a single growth decision while SWOT is often used to get a picture of firm’s current position.
After conducting the SWOT analysis, you can consider future strategic options. Five Forces assesses the viability of a specific product or service.
SWOT focuses on your business and its position while you can use Five Forces to analyze competitors.
Porter’s Five Forces helps find out how competitors could inhibit you.
Time orientation is another factor which differentiates SWOT and the Five Forces model. SWOT primarily assesses your current position and the future endeavors. On the other hand, Porter’s Five Forces analysis focuses mostly on future decisions of your company.