MADS 6601 Finance Administration
March 17, 2015
SWOT Analysis A SWOT analysis is a tool to identify the strengths, weaknesses, opportunities and threats involved in a business. Strengths mean characteristics of a business in advantage over others, while weaknesses are disadvantages relative to others. Opportunities mean elements that a business can exploit for its development, while threats are trouble will be face to. SWOT is to carry out the environment analysis and separate information into internal and external factors. Then, it determines whether they are favorable and unfavorable to achieve the objective so as to help an organization enhance advantages and minimize disadvantages.
A SWOT analysis needs to be conducted in a proper and realistic procedure to get the complete and objective results. The participants of this analysis should be a group of people with different perspectives so that they can contribute different valid viewpoints. They can be various stakeholders of a company, such as shareholders, managers, employees, and even customers. It is typically conducted using a SWOT matrix and holds a brainstorming session to identify the factors and bullets them with priority in each of the four categories. Participants must be realistic about the environment analysis of target organization and try to keep the analysis compact.
There are two most important part of a SWOT analysis, to help a business reduce risk and improve performance (Markgraf 2013). Firstly, this analysis can identify critical threats coupled with internal weaknesses that may put a company in a trouble. It improves the viability of a business about changing environment and highlights the most serious issues. For example, a new export policy issued by government could be a serious threat to the export-led industry. They should reduce resources allocated in export business and shift focus to domestic markets. Laurence (2013), a judicious recognition of