STRATEGIC
MANAGEMENT:
SWOT ANALYSIS FOR
BUSINESS
An Academic presentation by
Dr. Nancy Agnes, Head, Technical Operations, Tutors India
Group www.tutorsindia.com
Email: info@tutorsindia.com
Today's Discussion
OUTLINE
Introduction
Components of SWOT
Strengths
Weaknesses
Opportunities
Threats
Conclusion
INTRODUCTION
A SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is a tool that
facilitates organizational managers to evaluate the strengths, weaknesses,
opportunities and threats that might exist in any kind of business.
Conducting a SWOT analysis could prove to be very instrumental in helping the
organization to acquire in-depth insights into the past and conjure potential solutions
to current or potential challenges.
This SWOT analysis can be carried out for an organization that is already existing
within the market or for an organization that intends to make an entry into the market
in the near future (Gürel, 2017).
In particular, SWOT comes across as a model that is very fundamental and
transparent that can evaluate what a business is capable of doing or incapable of
doing, along with the possible opportunities and threats.
The SWOT analysis technique is to consider the information generated through an
environmental evaluation and segregate it to internal (strengths and weaknesses)
and external issues (opportunities and threats).
Following the completion of this activity, the SWOT analysis would determine what
would aid the organization in realizing their objectives, and the kind of challenges
that need to be overcome or reduced in order to realize the intended outcomes
(Namugenyi et al., 2019).
A large number of organizations execute a SWOT analysis during the stage of their
strategic planning and they attempt to identify and scrutinize the prevalent resources,
both externally as well as internally, examining their patterns and trends that might
result in either positive or negative business outcomes.
The objective of this paper is to familiarize you with the components of SWOT and
tips to conduct a SWOT analysis
COMPONENTS
OF SWOT
The actual process of SWOT analysis would comprise of splitting four areas into two
dimensions.
The four components of SWOT as mentioned above is Strength, Weakness,
Opportunities and Threats.
Strengths and weaknesses can be deemed as factors that are internal and also
make up the organizational attributes while, opportunities and threats would be
factors that are external and are usually the environmental attributes (Gürel, 2017).
STRENGTHS
This, as you would know makes up the first component of the SWOT.
This component would take into account aspects of your organization that is doing
particularly well. It need not be anything tangible or definite.
The strength of your organization could also be something that is intangible such as
the brand image of an organization or something which can be very easily defined
such as the organization’s unique selling proposition (USP) of a specific line of
products (Shewan, 2019).
In other cases, it could also be the human resources of the organization; robust
leadership or a highly effective research and development team.
Thus you identify the strength of your organization.
Following the identification of the organization’s
strengths, the next step would be to be critical about
oneself and identify and list out anything that you
think would be the weakness of your organization.
WEAKNESSES
Weakness does not refer to physical weakness
here but rather it refers to aspects of the
organization that is pulling your organization back.
Weaknesses could be anything such as financial
constraints, lack of skilled personnel, superior brand
image of competitor etc.
Akin to strengths, weaknesses also are an innate aspect of your organization.
Therefore, it would help if you focus on resources, procedures, systems and
people.
Consider aspects that you needs improvement and the kind of practices that
you need to curb (Wang et al., 2014).
Opportunities would refer to chances of something
good or positive happening.
However, it would not happen on its own, you need
to identify the opportunity and seize it.
Opportunities would generally tend to emerge from
situations that exist beyond your organization, and it
requires foresight on your part as to what might
happen in future.
Market or technology developments can be one
(Brad & Brad, 2015).
OPPORTUNITIES
For instance, in case there is a surge in demand for a niche product that your
organization can produce, that is an opportunity you can leverage.
But as mentioned, you need to be able to identify opportunities and harness it
such that it makes a difference to your organization.
THREATS
Lastly, the component of threat would comprise of anything that has the
propensity to make a negative impact on your business externally.
These would include; problems within the supply-chain, manpower shortage or
changes in market demands etc.
It is very necessary that you anticipate threats and initiate appropriate action to
negate the threat before it impacts you and causes a loss to your business or
thwarts your growth (Sarbah & Otu-Nyarko, 2014).
To identify threats, it might help if you try to list out the bottlenecks to your
business such as delivering your finished goods to the market, drop in quality of
your products amongst others.
Further, you should always keep yourself abreast of the activities that are being
carried out by your competitors and modify your strategy to tackle that threat.
Also there is the threat of new governmental or trade policies so, you need to
anticipate such threats to stay ahead of the competition and ensure success.
CONCLUSION
SWOT analysis is a tool that is being utilized within
the domain of strategic management for the past five
decades.
It has turned out to be a highly treasured tool as far as
planning and decision-making is concerned.
While there are a number of tools for analysis that
have been utilized during the strategic management
process, over the years a technique that has been
extensively used is SWOT analysis.
The use of SWOT helps in evaluating the external as well as the internal
environment of the organization and thereby lends support to situations where
strategic decisions are required.
This technique can be applied in several areas that require strategic analysis for
an industry, a product, an organization, a city, a project or even an individual.
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