Question

What is a SWOT analysis? What is it used for? What is the purpose of a SWOT analysis? How is a SWOT analysis best used in the planning process?

Answer 1

SWOT is an abbreviation for Strengths, weakness, opportunities and threats. It is a study that shows where an organization stands on these four aspects of the market. Which means what are its strengths, what are its weaknesses, what are the opportunities it can grab to grow and what are the threats it will face in the process of growth.

The strengths and weaknesses assess the internal factors and opportunities and threats assess the external factors. It helps to understand the competitive position of a company and develop strategic planning accordingly. The strength and weaknesses determine the company's potential and the opportunities and threats determine its chances of survival in the competition.

SWOT analysis helps in summarising the internal and external factors affecting the organizational growth. It identifies the key elements to focus on the growth and prioritize them. It supports in developing strategic plans based on which the business can function. The study of the internal and external environment helps the company to have clear policies, strategies and goals and present them before stakeholders.

SWOT analysis has always been an essential took for the planning process. Planning requires a thorough study of where the company stands, what are its capabilities and resources available, what are its loopholes and hindrances and how the market forces can affect its existence. Based on these points the planning is done on which the company runs. SWOT analysis helps in giving details on all these aspects so that the company can understand which approach and methods it has to use to plan its strategies and how well it can sustain with them.