SWOT is an important acronym for individuals and organizations alike in the business world and it stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is a useful technique to assess these four attributes which play a crucial role in an organization.
Strengths and weakness refer to internal factors such as (current processes, human resources, physical and financial resources, etc.) while opportunities and threats focus on external factors such as (market trends, economic trends, pollical and economic regulations, etc.).
Let us examine the four elements of SWOT in more detail.
Four elements of SWOT analysis
- Strengths: These are factors that distinguish an organization from its competitors. These are special positive traits, such as a strong brand image, a loyal customer base, or a unique technology that provides a clear advantage to the organization compared to rivals.
A SWOT analysis can be instrumental in identifying an organization’s Unique Selling Proposition (USP for short) that forms the basis for the company’s strength and keeps the business ahead of its competitors in the market.
- Weakness: Like strengths, weaknesses are internal factors in a business. Identifying these can help identify areas of improvement. Doing this lets organizations design measures to rectify and control their weak points, which in turn helps the company grow.
Like strengths, weaknesses such as low brand value, unused turnover, or lack of capital are strong attributes that impact and influence future course of action.
- Opportunities: These are external factors that are open and available to be used by the organization for its benefit. Organizations must have a good eye to identify and analyze prevailing opportunities in the market to be able to proactively exploit them. Such tactics can provide an organization with an edge in the market, allowing it to realize its future growth trajectory.
- Threats: Like opportunities, these are external or outside factors that negatively impact business. Threats can come in many forms — financial downturns, supply chain problems, stringent government regulations or shifts in market requirements, etc. which are outside the control of an organization.
Hence, it is…