Identifying Your Strengths, Weaknesses, Opportunities, and Threats
A SWOT analysis is a term used to describe a tool that is effective in identifying your Strengths and
Weaknesses, and for examining the Opportunities and Threats you face. While it is a basic, straightforward model, it has been a popular business practice for many years because it helps provide directionand serves as a basis for the development of business plans. It accomplishes this by examining the strengths (what an operation does well) and weaknesses (what an operation does not do well) in addition to opportunities (potential favorable conditions for an operation) and threats (potential unfavorable conditions for an operation). Once completed, the SWOT analysis can help determine if theinformation indicates something that will assist the operation in achieving its objectives (a strength or opportunity), or if it indicates an obstacle that must be overcome or minimized to achieve desired results (weakness or threat).
Why is the SWOT Analysis so Popular?
The SWOT analysis has been a popular business tool for many years. While business planning does require some time andknowledge, most planners agree that a SWOT analysis should be completed at the beginning of the planning process. Here are a few reasons why performing a SWOT analysis has been a popular planning activity.
• While not an easy task, performing a SWOT analysis does not require any special training, software, or skills. The only requirement for performing a SWOT analysis is being truly honestabout your own operation.
• Most managers and workers have expertise in areas that are not known by other members of the group. Organizing the expertise in a SWOT analysis helps in making informed decisions and provides better results.
• A SWOT analysis provides a brief but complete summary of the operation.
• While the finished results are important, the process of building a SWOT analysisis almost as valuable. Often times when a SWOT analysis is performed, all people involved with the operation become more aware of the performance and goals of the operation.
• Finally, completing a SWOT analysis allows you to immediately see where you can take action to improve your weak areas, capitalize on your strengths and opportunities, and defend against threats.
What are the elementsof a SWOT ANALYSIS?
The SWOT analysis stands for the analysis of internal strengths and weaknesses of an operation and external opportunities and threats to the operation. Below is a description of each of these elements that should be considered when performing a SWOT analysis.
The first element of a SWOT analysis describes the strengths of an operation. These strengthsinclude what an operation does well, and should be viewed from both your point of view as well as the point of view of people with whom you come in contact. In some cases an organization’s strengths are very obvious, for example, being a low cost producer. In other cases, it is a matter of perspective, for instance our product is of high quality. It is important to note that operations that are in abad position also have strengths. Whether these strengths are adequate should be determined through further analysis.
The other internal element of the SWOT analysis describes the weaknesses of an operation.
Examining weaknesses include identifying what an operation does not do well. As with the strengths, weaknesses should be examined from both your perspective and from theperspective of those outside your operation. It is also possible for weaknesses to be obvious such as a limitation of resources or be more of a perspective issue such as a lack of teamwork. All operations, regardless of size or profitability have weaknesses. How badly these weaknesses will affect the operation should be left to further analysis.
The first external element...