Meaning of a SWOT analysis
- SWOT is an acronym that stands for Strength, Weakness, Opportunities and Threats.
- SWOT is a technique which will help you in analyzing the current stage of the company and to develop a strong business strategy.
- It is used to develop objective and identify the internal and external factors that will influence in achieving it.
- Strength and weakness are the internal factors that you have some control over and can be changed.
- Opportunities and threats are the external factors that are very difficult to control and change.
- This tool can also be applied at an individual level to analyze internal and external factor that influence your career growth.
Elements of SWOT analysis
- Strengths are the positive factor of the organization that is favorable in achieving a goal.
- Strength can be either tangible like skilled labor, financially stable, etc. or intangible like good co-ordination, dedication, loyalty, etc.
- Strength enables an organization to accomplish its goals and objective.
- To analyze your strength you need to ask the following question:
- What are you best at?
- What unique ability do you possess?
- What qualities do you have in your teams, such as knowledge, education, skills and network?
- What kind of technology do you use?
- Weaknesses are the negative factor of the organization that is unfavorable in achieving a goal.
- Weaknesses are the internal factor which do not meet the standards, even we try to meet.
- It prevents a company from working at full potential and in achieving its goal.
- Weakness can be minimized and controlled by taking a certain measure.
- To analyze your weaknesses you need to ask the following question:
- What should you avoid and eliminate?
- What is your financial ability?
- What kind of training did your employees need?
- In which did you want to improve?
- It is the external factor that is helpful in achieving the goal of the organization.
- Opportunities always give a competitive advantage in the market.
- To determine opportunities in the market you need to ask the following question:
- What interesting trends are you aware of?
- Development in technology.
- Changes in government policies that are beneficial to you?
- What new market you can invest in?
- Threats are the external factor and are uncontrollable.
- It is the factor which can create a loss for the organization.
- This may arise due to the change in customer’s trends.
- To determine threats you need to ask the following question:
- Is the change in technology is bad for your market position?
- Is it a disadvantage in changing government policies?
- What is the current situation of your competitors?
- Does changes in environmental condition affects your business?
Purpose of SWOT analysis
- It plays an important role in doing strategic planning and making decisions.
- To identify internal and external factors which are favorable and unfavorable to the organization.
- Since SWOT covers all past and present data for analysis. Therefore it will be helpful in forecasting sales and demand.
- When you perform a SWOT analysis, you will be more focused in achieving the goal.