SWOT Analysis: How to perform one for your organization
Erica Olsen details how and why you should perform a SWOT analysis as part of your organization’s strategic plan.
An evaluation of an organisation’s strengths and weaknesses in relation to environmental opportunities and threats is generally referred to as a SWOT analysis. SWOT analysis is an important tool for auditing the overall strategic position of a business. It is designed to summarise the strategic situation, with a view to deciding what the organisation should do next.
It is essential to note that internal factors such as operations, finance, marketing, and other areas are within the control of the organisation.. External factors, such as political and economic factors, technology, competition, and other areas, on the other hand, are out of the organisation’s control.
A SWOT analysis should contain sufficient information for any reader to be able to see why a particular issue counts as a strength, weakness, opportunity or threat, and what the implications are for the company that you are analysing. For this, there is no room for ambiguity in a SWOT analysis: a factor can be a strength or a weakness, but not both.
In a SWOT analysis, the strengths and weaknesses relating to resources must bin relative and not absolute terms. It is important to consider whether they are being managed effectively, as well as efficiently. Resources, therefore, are not strong or weak purely because they exist or do not exist. Rather, their value depends on how they are being managed, controlled and used. Lists of strengths and weaknesses should not include factors that are common to every firm in an industry.
Once you’ve identified all of these factors, you can assess how to capitalise on your strengths, minimise the effects of your weaknesses, make the most of any opportunities and reduce the impact of any threats.