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Explanation of SWOT analysis

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Definitions of Internal strenghts& weaknesses and external opportunities&threats are given with the explanation of financial ratios and a sample SWOT analysis for Hewlett-Packard Company

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( PS: Detailed explanation of this analysis with tables, charts, figures and financial ratios is included in the attachment )


A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
Internal- Strengths and Weaknesses
A company's internal strengths usually represent its competitive assets. This can be a skill, a competence, a valuable organizational source, competitive capability or an achievement that gives the company a market advantage or a stronger name recognition. Weaknesses represent the competitive liabilities which is something that the company lacks, or does something poorly so that creates a disadvantage in the market (Thompson, Strictland 1992).


Hewlett-Packard is a global technology company and after its merger with Compaq it became world's biggest computer hardware and peripherals company in the world, ranking 20 in the Fortune 500 list. Company is doing business in more then 170 countries including the ones that are developing and under-developed. Being a large company gives HP many advantages like dominating the market for printers, both laser and inkjet, and both for consumers and companies using the economies of scale. The company is also taking an active role in developing the capacity of new markets all around the world, engaging with other multinational corporations, non-governmental organizations and other world governing bodies to reignite the competitiveness at home and abroad through policies and strategies that can support free-market economies. This is one of the reasons that makes HP a ...

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Explanation of SWOT analysis with an example from the Hewlett-Packard Company Strategic Plan