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What is the relationship between SWOT Analysis and Porter's Five Forces in competitive strategies?

SWOT Analysis and Porter's Five Forces are both strategic tools used in business to understand and navigate the competitive landscape. SWOT Analysis focuses on identifying a company's internal Strengths and Weaknesses, and external Opportunities and Threats. On the other hand, Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths. These forces are: Competition in the industry, Potential of new entrants into the industry, Power of suppliers, Power of customers, and Threat of substitute products. So, while SWOT is a comprehensive overview of a company's state, Porter's Five Forces is more focused on the industry's competitive environment. Both are used together to develop robust competitive strategies.

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Once you've analyzed your competitive landscape, it's time to assess yourself. SWOT Analysis is a common framework used by execs to determine their company's strengths, weaknesses, opportunities and threats. Strength and weaknesses are internal, company oriented, while opportunities and threats are more external, macro-oriented. (Slide 10)

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