thesis and conclusion

SWOT analysis is very common strategic business planning tool which helps the Business persons as well as business analysts to measure the strengths, weaknesses, opportunities and threats associated with a business. The tool was result of a research conducted at Stanford Research Institute in 1960. Generally, SWOT analysis involves four major elements (Strengths, Weaknesses, Opportunities, and Threats). The first two elements deal with internal analysis while next two elements deal with external analysis. Strengths and opportunities have common attributes and promoting each other. In the same line, weaknesses and threats have common attributes, different from first two elements (Hill & Westbrook, 2011).

The first element is strengths of an organization or business project. Strengths mean the core competencies or characteristics of organization in which it is rich. These are strategic factors which lead an organization towards success and to build the competitive advantage over its competitors. The second element is weaknesses of organization. Opposite to strengths, weaknesses are drawbacks of organization or particular competencies in which organization is poor. The weaknesses may lead the organization or project towards failure if they are not identified and resolved as well (Dyson, 2014).

The third element is opportunities. Opportunities could be things or factors which have potential to increase the benefit and profit of organization. Opportunities involve various things like change in economic circumstances, change in government policies, technological and cultural changes, emergence of new consumer needs and emergence of new markets as well. The most critical factor to opportunities is identification of right opportunities and taking the advantage of them. The fourth element of SWOT analysis is threats. Threats are strategic factors which have potential to harm the business. Unfavorable changes to laws, higher taxes and changes in consumer preferences are common threats. Threats can be mitigated through formulation of effective strategies (Hill & Westbrook, 2011).

Important Elements

Elements of the SWOT analysis are defined and assigned to each step; considered to be the backbone, these elements explain their role in how and why each step is important and vital to the analysis as a whole. “Every aspect of a SWOT analysis needs to be approached methodically” (Beagrie, 2004, How to... conduct a SWOT analysis, para. 4). Several elements reside within each step; the team considers the following as the most important elements per step within the analysis: Management and customer loyalty. Management is important to a firm to provide leadership qualities that will inspire and guide employees to complete their assigned tasks. As a result of these actions, employees will be able to provide customers with excellent service which will naturally please customers, ensuring their return. Weakness consists of the complete opposite of strengths; poor management and low customer satisfaction will repel customers as a result of poor leadership and employee abilities. In regards to opportunities, a change in demographics is an element that can affect companies due to the increase in population. This change will bring more customers in which case, management and employees must be sure to provide excellent customer service to ensure that customers return. Opportunities and threats share a common element that can benefit and damage a business; technological advances. These benefits can separate business from competitors within the same area of expertise, or the opposite can occur in which case, the same business can fall behind in sales or services. Elements in the last step within the analysis, threats, affect a business the most is an increase in taxes. Fortune five hundred have been able to avoid taxes by opening bank accounts in different countries, avoiding taxes; however it is the smaller businesses that experience the wrath of higher taxes. It’s for this reason why we believe this threat is most damaging to businesses. These elements were personally chosen due to their ability to benefit or damage a business the most.

Purpose of SWOT

Elements of the SWOT analysis are defined and assigned to each step; considered to be the backbone, these elements explain their role in how and why each step is important and vital to the analysis as a whole. “Every aspect of a SWOT analysis needs to be approached methodically” (Beagrie, 2004, How to... conduct a SWOT analysis, para. 4). Several elements reside within each step; the team considers the following as the most important elements per step within the analysis: Management and customer loyalty. Management is important to a firm to provide leadership qualities that will inspire and guide employees to complete their assigned tasks. As a result of these actions, employees will be able to provide customers with excellent service which will naturally please customers, ensuring their return. Weakness consists of the complete opposite of strengths; poor management and low customer satisfaction will repel customers as a result of poor leadership and employee abilities. In regards to opportunities, a change in demographics is an element that can affect companies due to the increase in population. This change will bring more customers in which case, management and employees must be sure to provide excellent customer service to ensure that customers return. Opportunities and threats share a common element that can benefit and damage a business; technological advances. These benefits can separate business from competitors within the same area of expertise, or the opposite can occur in which case, the same business can fall behind in sales or services. Elements in the last step within the analysis, threats, affect a business the most is an increase in taxes. Fortune five hundred have been able to avoid taxes by opening bank accounts in different countries, avoiding taxes; however it is the smaller businesses that experience the wrath of higher taxes. It’s for this reason why we believe this threat is most damaging to businesses. These elements were personally chosen due to their ability to benefit or damage a business the most.

Advantages and Disadvantages

The SWOT analysis is used to determine a company’s current position in four key areas. The company’s strengths are important to keep track of, and these qualities are where the business maintains outside focus. The weaknesses category is vital to know so that they can keep internal focus on making improvements in these areas. Opportunities show where the business can take advantage of untapped resources or markets. Threats represent the areas where the business might be caught off guard or be affected by outside influences such as market or environment. There are a few alternatives to using SWOT. One is SCOPE, which focuses on situation, core competencies, obstacles, prospects, and expectations. Another is a positive thinking strategy called SOAR; this measures strengths, opportunities, aspirations, and results. Finally, yet another method goes deeper into the CORE assessment, examining capital investment, owner involvement, risk assessment, and exit strategy. There are advantages and disadvantages to the SWOT analysis. An advantage is that it addresses four key areas in business management, and it can be used for a number of problem domains. A disadvantage is that it is highly subjective. An advantage is that it is cost effective, but a disadvantage is that it does not weigh any of the elements against each other in terms of which may be valued more.

Conclusion

References

Beagrie, S. (2004). How to... conduct a SWOT analysis. Personnel Today, 21. Retrieved from http://search.proquest.com/docview/229950392?accountid=458

Dyson, R. G. (2014). Strategic development and SWOT analysis at the University of Warwick. European journal of operational research, 152(3), 631-640.

Hill, T., & Westbrook, R. (2011). SWOT analysis: it's time for a product recall. Long range planning, 30, 46-52.