In the 1960’s and 70’s, Albert Humphrey is said to have developed this strategic planning tool using data from the top companies in America at the time. A SWOT Analysis looks at the strengths, weaknesses, opportunities and threats that are relevant to an organization in a new venture. A SWOT Analysis is a tool which allows users to look at the direction a company or organization may wish to move towards in the future. A SWOT Analysis is a useful tool, which in conjunction with others can help make informed decisions.
Definition of SWOT
Many people see SWOT as synonymous with strategic planning. In fact, a SWOT analysis is only one of many tools that can be used in an organization’s strategic planning process. SWOT is short for “Strengths, Weaknesses, Opportunities and Threats”. By specifying clear objectives and identifying internal and external factors that are either helpful or not, a short and simple SWOT analysis is a useful resource which may be incorporated into an organizations strategic planning model. Strengths
Internal attributes those are helpful to the organization to achieving its objective Weaknesses
Internal attributes that are harmful to the organization to achieving its objective Opportunities
External factors that help the organization achieve its objective
External factors those are harmful to the organization to achieving its objective. After identifying the SWOT’s, identification of the factors and their interdependence helps clarify the steps needed to achieve the ending objectives.
Internal and External Factors
The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. SWOT analysis groups key pieces of information into two main categories: * Internal factors – The strengths and weaknesses internal to the organization * External factors – The opportunities and threats pre-sented by the exter-nal environment.
HelpfulTo achieve objectives| HarmfulTo achieve objectives| Internal origin| strengths| Weaknesses|
External origin| opportunities| threats|
The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weak-nesses for another objective. The factors may include all of the 4P's; as well as personnel, finance, manufac-turing capabilities, and so on.
The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the mar-ketplace or competitive position. The results are often presented in the form of a matrix.
Purpose of swot analysis
A SWOT analysis is designed to help an organization understand how it relates to its external environment. In other words, to act as a way of seeing if the organization is aligned with the world going on around it. * Workshop sessions
* Problem solving
* Product evaluation
* Strategic planning
* Competitor evaluation
* Personal development planning
By focusing on the key factors affecting your business, now and in the future, a SWOT analysis provides a clear basis for examining your business performance and prospects. This briefing outlines: • Typical strengths, weaknesses, opportunities and threats, and how to identify them. • How to use SWOT analysis to drive your business forward.
Use SWOT analysis as part of a regular process of reviewing your business performance. You may also want to carry out a SWOT analysis in preparation for raising finance or before bringing in consultants to review your business.
1.1 Decide who to involve.
• Key participants are likely to include the managing...