Swot Analysis

SWOT stands for :

Strengths, Weaknesses, Opportunities, and Threats

Swot analysis is done to find the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture.

SWOT analysis is performed by specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective.

So actually what it is done in SWOT analysis?



We identify the following

• Strengths: Identify the strengths or characteristics of a business or team that give it an advantage over others in the industry.
• Weaknesses: The Weakness or characteristics that place the firm at a disadvantage relative to others.
• Opportunities: What are the external factors or opportunities to make greater sales or profits in the environment?
• Threats: What are the threats that cause trouble for the business?

Identification of SWOTs is essential because subsequent steps in the process of planning for  achievement of the selected objective may be derived from the SWOTs.
The decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated.
What makes SWOT particularly powerful is that, with a little thought, it helps in uncovering opportunities that can be exploited. And by understanding the weaknesses in a business, we can mitigate the threats.

Strengths and weaknesses are often internal to the organization, while opportunities and threats generally relate to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix.

SWOT Analysis is a simple but proactive method for analyzing the organization’s strengths and weaknesses, and the opportunities and threats that they face. It helps in focusing on the strengths, minimizing the threats, and takes the greatest possible advantage of opportunities available.

SWOT Analysis can be used to “kick off” strategy formulation. SWOT is commonly used as part of strategic planning.

On a serious note: When carrying out SWOT Analysis, be realistic and rigorous. It is a proactive approach rather a reactive approach.

A usual SWOT matrix can be constructed as: