Question

What is a SWOT analysis? Explain in detail and give examples.

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Answer 1

The comparison of strengths, weakness, opportunities , and threats is normally referred to as SWOT analysis

• Strength : strength is an inherent capability of the organization which it can use to gain strategic advantage over its competitors .
• Weakness: a weakness is an inherent limitation or constraint of the organization which create strategic disadvantage to it
• Opportunity : an opportunity is a favourable condition in the organization’s environment which enables it to strengthen its position
• Threat : a threat is an unfavourable condition in the organisation environment which causes a risk for or demand to the organisation’s position

Its central purpose is to identify the strategies that will create a firm specific business model that will best align fit or match an organisational resources and capabilities to the demand of the environment in which it operates . strategic managers compare and contrast the various alternative possible strategies against each other with respect to their ability to achieve major goals and superior profitability .

Thinking strategically requires managers to identify the set of strategic that will create and sustain a competitive advantage .

SWOT analysis lies in the following points

• It provide a logical framework
• It presents a comparative account
• It guide the strategist in strategy identification

SWOT analysis helps managers to craft a business modelthat will allow a company to gain a competitive advantage in industry .

Competitive advantage leads to increased profitability and this maximise a company’s chances of surviving in the fast changing global competitive environment that characterizes most industries today