Question

explain what S.W.O.T analysis involves.

what are the benefits of using this as a strategic planning tool?

Answer 1

SWOT analysis also known as internal analysis stands for Strengths, Weaknesses, Opportunities and Threats. The SWOT analysis involves analysis of both the internal as well as external environment.The four factors of SWOT analysis combine to give excellent information to the company such that the company can proceed to decision making once it knows its strengths, weaknesses, opportunities and threats.

BENEFITS

A SWOT analysis is a key component of strategic planning process. This easy-to-use tool identifies company’s strengths and weaknesses along with the opportunities and threats it faces .The analysis helps to see how to stand out in the marketplace; how to grow as a business; and where it is vulnerable. The process takes into account both internal and external factors a company must navigate.SWOT analysis is especially important during strategic planning wherein the organization needs to decide the strategy which it has to take. The strategic decisions can be made only when the organization knows everything about itself as well as where it stands in the market. Therefore it uses “Internal Analysis” or “SWOT Analysis”.

• Strengths – Gives confidence about factors which the company got right and which it can capitalize on.

• Weaknesses – Shows the major weaknesses within a company which the company needs to work on

• Opportunities – Informs of the opportunities available to the company to increase business and get further customers

• Threats – Determines the major threats for the company, whether they be in internal environment or external.