Question

The SWOT is an excellent research tool. But how do you know how to answer the elements of the SWOT--strengths, weaknesses, opportunities, threats? What do you need to make your answers reliable? As a related question, what constraints would you face in trying to do a reliable SWOT (access to research, budget limits, etc.) and how would you manage those?

Answer 1

It is true that SWOT analysis is one of the best technique to have a knowledge about the industry and market to identify your strengths, weaknesses, opportunities and threats. But the main question is how we assess these criteria? The answer is through analytical and business research. Many big organisations have a seperate Research and Development (R&D) function or department which is specifically designed to conduct the researches about the products, processes, resources and the organisation and large in the market about its working and operations.

The R&D department often takes industrial analysis and compare the organisation with its main competitiors to have an ample knowledge about what might the organisation's strengths could be. The market share, financial stability or Quality of products tells the strengths of the organisation. Weaknesses like Legal disputes etc are checked through the company's performance and the goodwill it has in the market. Opportunities could be tracked via the current company's operations and the technology which is being used in the market and how company could effectively use the market idea or technology to better develop a product or service. At last, threat could be assessed by analysing various company's operations, competitiors, substitutes and risks which are available and could affect the operations of the firm. All these factors could be make reliable by assessing them regularly and seeing whether the results are same or not. By having a constant analysis about the market and your competitiors, one can never miss any opportunity or avoid threat.  

The type of constraints for such development and research are the funds, company's lack of external analysis, lack of market knowledge, good resources etc. These constraints could be removed off by having a good image in the market which would attract more shareholders and more funds. By having goodwill, banks would also easily provide funds to operate the business and if the business is not haviny specific department for R&D, one can outsource this work to other organisation which is another big industry based on business analytics nd data models of market.