Strategy formulation requires an objective analysis of the factors that characterize the company’s strategic situation. There are a number of techniques that can be used to create a quick strategic overview of the company. SWOT analysis is an example of such a technique. SWOT analysis is based on the assumption that an effective strategy derives from a soundit” between the company’s internal resources (Strengths and Weaknesses) and its external situation (Opportunities and Threats). A good fit maximizes the company’s strengths and opportunities and minimizes its weaknesses and threats.

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