SWOT analysis is an effective management tool that helps in strategy formation and in taking various business decisions. The “SWOT” Acronym stands for Strengths, Weaknesses, Opportunities, and Threats which come during the course of any business. Let us know about that the Conclusion Of SWOT Analysis.
In the era of rapid expansion of businesses, the SWOT analysis is used almost by all including government, Non- profit organizations, investors, and entrepreneurs.
SWOT analysis can identify a market niche in which a business has a competitive edge. It assesses both internal and external factors which would affect the working of the organization.
Conclusion Of SWOT Analysis
Indeed the SWOT analysis is not an answer to all business problems and decisions but the conclusion in favor of SWOT analysis is that it makes strategic decisions effective in multiple ways:
- While making any Complex business decisions, there is n number of hurdles that come all along the way. SWOT analysis helps to sort and categorize such problems.
- SWOT analysis provides answers to almost every question with arises in the ordinary course of business, whether it is related to changes in the product line, brand, geographical location, Expansion, merger or closure of business.
- A SWOT analysis is quite economical as it doesn’t require technical expertise.
- As SWOT analysis helps in working on the strengths & weaknesses of a business it helps in keeping a check on internal factors, on the other hand, the analysis of opportunities and threats keeps a check on external factors.
Hence a business may use SWOT for overall business strategy sessions or for a specific segment such as marketing, production, or sales. In the absence of SWOT, a business may face chaos in its daily chores, decisions, and activities.
As every system and working has its cons too hence so is the SWOT analysis. It is a popular and effective method in helping business organizations examine their specific strategies and the direction of their objectives but as we know it’s not a perfect system. There are some challenges involved with using SWOT; it only addresses one side or view of business planning, and it can produce biased results without the right data. It’s important to be aware of some of the challenges in order to produce more meaningful, unbiased outcomes.
Steps to SWOT Analysis
Any procedure when carried out in the correct order gives us the result needed, hence it is very essential that an accurate SWOT analysis is done so that the necessary information is forwarded to the process of strategic planning. The following steps assist in the efficient application of SWOT:
Step 1- Identifying strengths
Strengths describe what an organization is good at. Identifying strengths come under the analytical step of assessing the internal factor of any business organization. There are various questions that can be asked to identify the strength of your own organization like what are the advantages available to me which give my organization an edge over other organizations?
What are the unique capabilities and resources available to my organization?
What is the market strength of my organization?
By getting logical and reasonable answers to these questions,an organization can get its strengths which would help in making strategic decisions.
Step2- Identifying Weaknesses
While identifying the weaknesses of an organization you must be very honest and logical because weakness helps you to identify where you are organization is lacking and this it would affect the strategic decision-making very much. The following questions can be asked while identifying the weaknesses, how can my organization improve? What are the aspects which should be avoided? What are the factors that affect the downfall of sales?
Hence if these questions are answered sincerely the organization can identify its weaknesses very well and find measures to work on those.
Step3 – Identifying Opportunities
Opportunities are the external factors that are favorable and provides an edge to the organization. Identifying opportunities comes under the analytical step of assessing the external factors affecting the working of an organization. Opportunities can be discovered by using the previously discovered strengths.
Opportunities can be found by answering the questions like what are the interesting Trends of the market which match the previously identified strengths?
What are the good opportunities which are available in the present market? Hence if the opportunities are worked upon carefully they might catapult the business organization to a new height.
Step 4 – Identifying Threats
It is very much important to identify the hurdles that come during the ordinary course of business the hurdles or threats so can be identified by answering the following questions, who are the competitors, and what are their activities? What are the challenges that an organization is going to face if some of its Technology becomes obsolete? Keeping in view the weaknesses what are the hurdles or obstacles that the organization is currently facing? By answering the following questions an organization can assess its threats and work on those accordingly.
On the bottom line, SWOT Analysis is the best way for making strategic decisions, It gives the potential everyone around the table to know and discuss the organization’s strengths, weaknesses, opportunities, and threats that arise in the course of business.
A company may use it for taking overall decisions or for taking decisions for a specific line of product or service. Hence as SWOT system has both pros and cons, the requirement or existence of SWOT is very much necessary for any business organization.
Frequently Asked Questions
- What are the advantages of SWOT analysis in decision-making?
It develops a sense of strategic thinking in the top management which would help the organization to attain higher positions and work efficiently in the ordinary course of business.
- What are the uses of SWOT Analysis?
- SWOT analysis can be used in making decisions in the area of human resources.
- It helps in making decisions regarding investment in technologies.
- It helps in assessing and improving the services which are given to the customers.
- It helps in making decisions regarding new lines of products and services.