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    es the company do well? What makes it better than others? What does the company have, or do, that sets it apart from its competition?

    These are important questions, and should include aspects of the company that made you consider it for investme

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    If you’ve ever listened to Warren Buffett talk about investing, you’ve heard him mention the idea of a company’s moat. The moat is a simple way of describing a company’s competitive advantage. A strong competitive advantage, or a wide moat, gives a company sustainability, which, as investors, we’re highly interested in.

    In this article, we review a popular tool for evaluating competitive advantage, called SWOT analysis. SWOT analysis should be done on every company we’re thinking of making an investment in.

    SWOT stands for:

    Strengths


    Weaknesses


    Opportunities


    Threats

    Analyzing these four factors will help you make better investment decisions. It’s a brainstorming exercise, so take your time. A good SWOT analysis takes effort, but the more you put into SWOT analysis the better you will understand the company. Let’s look at each factor in turn.

    Strengths

    First, we look at the company’s strengths. What does the company do well? What makes it better than others? What does the company have, or do, that sets it apart from its competition?

    These are important questions, and should include aspects of the company that made you consider it for investmen

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    mpany sustainability, which, as investors, we’re highly interested in.

    In this article, we review a popular tool for evaluating competitive advantage, called SWOT analysis. SWOT analysis should be done on every company we’re thinking of making an investment in.

    SWOT stands for:

    Strengths


    Weaknesses


    Opportunities


    Threats

    Analyzing these four factors will help you make better investment decisions. It’s a brainstorming exercise, so take your time. A good SWOT analysis takes effort, but the more you put into SWOT analysis the better you will understand the company. Let’s look at each factor in turn.

    Strengths

    First, we look at the company’s strengths. What does the company do well? What makes it better than others? What does the company have, or do, that sets it apart from its competition?

    These are important questions, and should include aspects of the company that made you consider it for investme

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    investment in.

    SWOT stands for:

    Strengths


    Weaknesses


    Opportunities


    Threats

    Analyzing these four factors will help you make better investment decisions. It’s a brainstorming exercise, so take your time. A good SWOT analysis takes effort, but the more you put into SWOT analysis the better you will understand the company. Let’s look at each factor in turn.

    Strengths

    First, we look at the company’s strengths. What does the company do well? What makes it better than others? What does the company have, or do, that sets it apart from its competition?

    These are important questions, and should include aspects of the company that made you consider it for investme

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    ise, so take your time. A good SWOT analysis takes effort, but the more you put into SWOT analysis the better you will understand the company. Let’s look at each factor in turn.

    Strengths

    First, we look at the company’s strengths. What does the company do well? What makes it better than others? What does the company have, or do, that sets it apart from its competition?

    These are important questions, and should include aspects of the company that made you consider it for investme

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    es the company do well? What makes it better than others? What does the company have, or do, that sets it apart from its competition?

    These are important questions, and should include aspects of the company that made you consider it for investment in the first place. Look at branding, image, pricing power, size, market share, financial position (balance sheet strength), etc.

    Here are some strengths to look for:

    • The size of the company relative to others in the industry

    • Balance Sheet strength

    • Cash flows

    • Perception of the company’s products

    • Perception of the company’s brand(s)

    • What advantages the company has over its competitors

    • In general, what does the company do well?

    Weaknesses

    Now that you’ve determined how wonderful the company is, it’s time to look for the weaknesses. The same questions should be asked when looking for weaknesses. What does the company do poorly, or not so well? What are other companies doing better? What is keeping the company from greater success.

    It’s important that you don’t gloss over this section. SWOT analysis is a brainstorming effort, so don’t discount anything that comes to mind. If yo

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