SWOT Analysis Information

SWOT analysis is a good way to approach business plans.

A SWOT analysis is a four-part approach to analyzing and evaluating an organization and its environment. The SWOT analysis can tell you where your organization is situated in the market at the current time, and examines the organization's strengths, weaknesses, opportunities and threats (hence, "SWOT"). SWOT analysis works for businesses, non-profit organizations or even an entire industries, such as the advertising industry.

Strengths

The "strengths" element of the SWOT analysis considers the internal strengths of the business or department. According to the text "Fundamentals of Management," strengths are skills and capabilities that enable an organization to implement its strategies. They could be anything from obvious strengths, such as "loyal customer base" and "low staff turnover," to more complex strengths such as "selling directly to customers, therefore keeping costs low and cutting out the middle man." It is vital that an organization recognizes what its strengths are and how to maintain them.

Weaknesses

The "weaknesses" of an organization are those internal factors that are negatively affecting the organization's overall performance. An organization must first recognize its weaknesses before it can develop solutions to them. Examples of weaknesses could be "poor cash flow" or "little visibility in the media". According to the book "Marketing Strategy," weaknesses can often be converted into strengths by investing in that area. However, if that is not possible, then they instead become an organization's limitations.

Opportunities

The second part of the SWOT analysis, incorporating "opportunities" and "threats", is focused on the external factors affecting an organization. Those could be political or social changes, the introduction of new technologies, or anything else that presents an opportunity to the organization for expansion or growth. Once your organization understands clearly what opportunities are available to you, you can then start thinking about how to make the most of them. Examples of opportunities could include "an unfulfilled customer need" or "change in trade laws" (of course, a change in trade laws could just as easily be considered a threat, depending on how it affects your organization).

Threats

"Threats" again refers to external elements that may have a negative impact on the organization. In "Fundamentals of Management," threats are described as areas that increase the difficulty of an organization to perform at a high level. It is just as important to be aware of your threats as it is of your opportunities, so that you are able to prepare and perhaps form a contingency plan. Examples of threats include "new competitors" or "rising costs to produce product".

Functions of a SWOT analysis

The SWOT analysis plays a key part in strategic planning and decision making. For example, if one of the weaknesses of your organization was internal communications, you may well set about developing a strategy to improve internal communications, such as introducing an in-house email or telephone system.

SWOT analysis is useful to provide a snapshot of your organization's overall performance, but it is limited on its own, and may well provide more insight into the organization when combined with further analysis, such as an analysis of your organizations key stakeholders.

References

• "Planning and Managing Public Relations Campaigns", Anne Gregory, 2000
• Marketing teacher-SWOT analysis
• "Fundamentals of Management", Ricky Griffin, 2008
• "Marketing Strategy", O.C. Ferrel and Micheal D. Hartline, 2008