SWOT is a business management anagram that stands for strengths, weaknesses, opportunities and threats. It is a tool that originated in the business world but is useful for any kind of strategic planning. It’s a simple but useful framework that helps you focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you.
The overall purpose of a SWOT analysis is to examine the internal and external factors that help or hinder your business in achieving each of your objectives (1). It can be used as a brainstorming tool, simply so see how you see your business. It can also be used very effectively in the early stages of a program assessment, to help focus your attention on key areas.
A management team will use the SWOT analysis identifying the internal and external factors that will affect the company’s future performance. The company’s strengths and weaknesses are the internal factors. Opportunities and threats deal with factors external to the company. SWOT analysis is also done as part of the overall corporate planning process in which financial and operational goals are set for the upcoming year and strategies are created to accomplish these goals(2).
The first step is identifying key strengths of a company. Every business, even the largest ones that dominate their markets, has a finite supply of labor, production capacity and capital. Evaluating the company’s strengths helps it determine how to allocate these resources in a manner that will produce the highest possible outcome for revenue growth and profitability.
SWOT ANALYSIS 3 Like strengths, companies also need to look at their primary weaknesses. This will identify the most critical areas that need...