What is SWOT analysis ?

SWOT analysis is something you often go through if you own a business unit or deal with certain business activities. SWOT analysis is a significant analytical tool for environmental analysis.

What is SWOT analysis ?

SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identifying both the Opportunities open to you and the Threats you face.

It is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats. Further, it is a study of whole organisational environment separately in terms of S- strength, W-Weakness for the internal environment and O- opportunity T- threats, external environment. It can be defined as…..

Strength: Strength is an inherent capability which justify the existence of an organisation and  the only source to grab market opportunities in the market. For example: A company has adequate fund or efficient employees or customer are satisfied with its products or services and so on.

Weakness: It is an inherent limitation of organisation which creates the strategis disadvantages to it. Weakness of an organisation may be the high cost structure, weak brand name, poor reputation over the market etc.

Opportunity: Opportunity is a favorable market condition in an organisation’s environment which helps to strengthen its position. When looking at opportunities you have to consider the strengths and ask yourself whether these open up any opportunities. Alternatively, you have to look at your weakness and consider whether you could grab opportunity by eliminating weaknesses.

Threats: A threat is a unfavorable condition in external environment which causes risk for or causes damage to the organisation position.

SWOT is the comparison between internal and external environment in a structured form. It enforces the organisation towards its ambition using its strength to take the possession of favorable external environment.  At the same time, it also considers the threats that may take down  the organisation.

The understanding of SWOT analysis guides to minimize the threats and convert it into opportunity on the basis of its internal strength.

In conclusion, the SWOT analysis is to help you develop a strong business strategy by making sure that you’ve considered all of your business’s strengths and weaknesses, as well as the opportunities and threats it faces in the marketplace.

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