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What is SWOT Analysis?

Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis is a strategy development tool that matches internal organizational strengths and weaknesses with external opportunities and threats.


. Successful businesses build on their strengths. correct their weaknesses and protect against internal vulnerabilities and external threats. SWOT analysis is a tool that helps many businesses in this process. Why SWOT Analysis? SWOT Analysis is the Key Component of Strategic Development. It can prompt actions and responses. They also keep an eye on their overall business environment and spot and exploit new opportunities faster than competitors.A Balanced Perspective SWOT analysis helps you balance idealism and pragmatism. and obtain a balanced perspective of your internal strengths and weaknesses and external opportunities and threats to develop an effective strategy.

Strengths Two factors contribute to your strengths: ability and resources available. . Quality: the quality and up-to-dateness of the resources employed. Ability is evaluated on 3 counts: Versatility: your ability to adapt to an ever changing environment. Markets: your ability to penetrate or create new markets. Growth: your ability to maintain a continuing growth. Allocation: your ability to distribute resources both effectively and efficiently. The strength of resources has three dimensions: Availability: your ability to obtain the resources needed.

. inadequate systems or processes. technological backwardness. defeats. Protection through cover-up and prevention strategies to reduce the exposure of your weaknesses. losses and inability to match up with the dynamic situation and rapid change. insufficient quality. slow deliveries.Weaknesses Your weaknesses are determined through failures. or shortage of resources.1 Correction of an identified defect. There are three possible outcomes to the analysis of your weaknesses. The weaknesses may be rooted in lack of managerial skills. Aggression to divert the attention from your weaknesses.

Opportunities Opportunities are abundant. or making a surprise move into an uncontested area. target market. Collaboration: you can use your complementary strengths to establish a strategic alliance with your competitor. The formula must define product/service. . You can exploit them in two following ways: Marketing warfare: attacking the weak leader's position and focusing all your efforts at that point. returns expected and the level of risk allowed. You must develop a formula which will help you define what comes within the ambit of an opportunity to focus on those areas and pursue those opportunities where effectiveness is possible. capabilities required and resources to be employed. Weaknesses of your competitions are also opportunities for you.

The political situation determines government policy and taxation structure. or demographic shifts. Market changes may result from the changes in the customer needs. economic. competitors' moves. social. technological (PEST) forces. Technological developments may make your offerings obsolete.Threats External threats arise from political. .

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