What Is Swot Analysis

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resources and capabilities to the requirements of the environment in which the firm operates. In other words, it is the foundation for evaluating the internal potential and limitations and the likely opportunities and threats from the external environment. It views all positive and negative factors inside and outside the firm that affect the success. A consistent study of the environment in which the firm operates helps in forecasting/predicting the changing trends and also helps in including them in the decision-making process of the organization. An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats) is given below- 1. Strengths A strength is a competence of the organization which it can use to gain competitive…show more content…
Overcome organization’s threats. f. It helps in identifying core competencies of the firm. g. It helps in setting of objectives for strategic planning. h. It helps in knowing past, present and future so that by using past and current data, future plans can be chalked out. SWOT Analysis provide information that helps in synchronizing the firm’s resources and capabilities with the competitive environment in which the firm operates. 3.8.2 LIMITATIONS OF SWOT ANALYSIS SWOT Analysis is not free from its limitations. It may cause organizations to view circumstances as very simple because of which the organizations might overlook certain key strategic contact which may occur. Moreover, categorizing aspects as strengths, weaknesses, opportunities and threats might be very subjective as there is great degree of uncertainty in market. SWOT Analysis does stress upon the significance of these four aspects, but it does not tell how an organization can identify these aspects for itself. There are certain limitations of SWOT Analysis which are not in control of management. These include- a. Price increase; b. Inputs/raw materials; c. Government legislation; d. Economic…show more content…
However with the rise of competition, a further advanced SWOT analysis is being used. Advanced SWOT analysis not only helps in self assessment of your own company but also does a SWOT on the competition. Thus by doing an advanced SWOT analysis you can determine the factors which are paying off well for your competition and probably apply to your own organization. At the same time the organization comes to know about the weakness faced by the competitors and accordingly they can take proper course of action. Thus the Advanced SWOT can be used along with the basic for better market analysis. The SWOT Analysis Matrix The organization would accurately know their SWOT. While analyzing, several new threats as well as opportunities might show up. Thus these factors are characterized by a SWOT matrix. A SWOT matrix is 2 x 2 matrix which is basically divided by having one factor determine each axis of the matrix. Once the factor are aligned within the matrix the SWOT matrix helps us to decide the strategies which an organization can use. The SWOT Matrix is also known as the TOWS matrix. Here is an image of the SWOT matrixThe following figure shows a SWOT

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