The main goal of a context analysis, SWOT or otherwise, is to analyze the environment in order to develop a strategic plan of action for the business.
It consists of analyzing political, economical, social, technological and demographic trends.
This can be done by first determining which factors, on each level, are relevant for the chosen subject and to score each item as to specify its importance.
Demographic trends are those factors that have to do with the population, like for example average age, religion, education etc.
For example: [Ducati] has, by interviewing a lot of their customers, concluded that their main competitor is not another bicycle, but sport-cars like [Porsche] or [GM].
Likewise, the competitor analysis revealed positive and negative competition issues that can be classified as opportunities or threats.
The aim is to determine which skills, knowledge and technological fortes the business possesses.
Competences are the combination of a business’ knowledge, skills and technology that can give them the edge versus the competition.
The trend and competitor analysis revealed the opportunities and threats posed by the market.
These strengths, weaknesses, opportunities and threats summarize the entire context analysis.
Thus the matrix reveals four clusters: The ultimate goal of context analysis is to develop a strategic plan.
Therefore, he conducts context analysis to gain insight into the environment of the business in order to develop a strategic plan of action to achieve competitive advantage within the market.
Joe analyzes the competition on four levels to gain insight into how they operate and where advantages lie.
After Joe has identified the opportunities and threats of the market he can try to figure out what Arden System's strengths and weaknesses are by doing an organization analysis.
After the previous analyses, Joe can create a SWOT-i matrix to perform SWOT analysis.