Strengths (S) and weaknesses (W) are intrinsic whereas opportunities (O) and threats (T) are extrinsic and come from the competitive environment.
Once identified, they are recorded using a tool called SWOT (based on the initials), which is a very useful way of diagnosing the present situation and helps to identify:
Weaknesses and how they can be corrected
Strengths and how they can be exploited
External threats from the market and how they can be dealt with
Opportunities and how the most can be made of market opportunities
Any of these questions (e.g. how can the most be made of a specific opportunity? how can a specific weakness be overcome?) provides a way of identifying the creative challenges and of generating ideas for innovative resolution.
