SWOT Analysis

SWOT is an acronym for Strengths, Weaknesses, Opportunities and

Threats. By definition, Strengths (S) and Weaknesses (W) are considered to be
internal factors over which you have some measure of control. Also, by definition,
Opportunities (O) and Threats (T) are considered to be external factors over which
you have essentially no control.
SWOT Analysis is the most renowned tool for audit and analysis of the
overall strategic position of the business and its environment. Its key purpose is to
identify the strategies that will create a firm specific business model that will best
align an organizations resources and capabilities to the requirements of the
environment in which the firm operates.
In other words, it is the foundation for evaluating the internal potential and
limitations and the probable/likely opportunities and threats from the external
environment. It views all positive and negative factors inside and outside the firm
that affect the success. A consistent study of the environment in which the firm
operates helps in forecasting/predicting the changing trends and also helps in
including them in the decision-making process of the Individual or organization.
An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats)
is given below1. Strengths - Strengths are the qualities that enable us to accomplish the
organizations mission. These are the basis on which continued success can
be made and continued/sustained.
Strengths can be either tangible or intangible. These are what you are wellversed in or what you have expertise in, the traits and qualities your
employees possess (individually and as a team) and the distinct features that
give your organization its consistency.
Strengths are the beneficial aspects of the organization or the capabilities of
an organization, which includes human competencies, process capabilities,
financial resources, products and services, customer goodwill and brand
loyalty. Examples of organizational strengths are huge financial resources,
broad product line, no debt, committed employees, etc.

2. Weaknesses Weaknesses are the qualities that prevent us from accomplishing our
mission and achieving our full potential. These weaknesses deteriorate
influences on the organizational success and growth. Weaknesses are the
factors which do not meet the standards we feel they should meet.
Weaknesses in an organization may be depreciating machinery,
insufficient research and development facilities, narrow product range, poor
decision-making, etc. Weaknesses are controllable. They must be minimized
and eliminated. For instance - to overcome obsolete machinery, new
machinery can be purchased. Other examples of organizational weaknesses
are huge debts, high employee turnover, complex decision making process,
narrow product range, large wastage of raw materials, etc.
3. Opportunities Opportunities are presented by the environment within which
our organization operates. These arise when an organization can take benefit
of conditions in its environment to plan and execute strategies that enable it
to become more profitable. Organizations can gain competitive advantage by
making use of opportunities.
Organization should be careful and recognize the opportunities and grasp
them whenever they arise. Selecting the targets that will best serve the
clients while getting desired results is a difficult task. Opportunities may arise
from market, competition, industry/government and technology. Increasing
demand for telecommunications accompanied by deregulation is a great
opportunity for new firms to enter telecom sector and compete with existing
firms for revenue.
4. Threats Threats arise when conditions in external environment jeopardize the
reliability and profitability of the organizations business. They compound the
vulnerability when they relate to the weaknesses. Threats are uncontrollable.
When a threat comes, the stability and survival can be at stake. Examples of
threats are - unrest among employees; ever changing technology; increasing
competition leading to excess capacity, price wars and reducing industry
profits; etc.

Advantages of SWOT Analysis:

SWOT Analysis is instrumental in strategy formulation and selection. It is a strong
tool, but it involves a great subjective element. It is best when used as a guide, and
not as a prescription. Successful businesses build on their strengths, correct their
weakness and protect against internal weaknesses and external threats. They also
keep a watch on their overall business environment and recognize and exploit new
opportunities faster than its competitors.
SWOT Analysis helps in strategic planning in following mannera. It is a source of information for strategic planning.
b. Builds organizations strengths.
c. Reverse its weaknesses.
d. Maximize its response to opportunities.
e. Overcome organizations threats.
f.

It helps in identifying core competencies of the firm.

g. It helps in setting of objectives for strategic planning.

h. It helps in knowing past, present and future so that by using past and current
data, future plans can be chalked out.
SWOT Analysis provide information that helps in synchronizing the firms resources
and capabilities with the competitive environment in which the firm operates.

SWOT ANALYSIS FRAMEWORK

Limitations of SWOT Analysis

SWOT Analysis is not free from its limitations. It may cause organizations to view
circumstances as very simple because of which the organizations might overlook
certain key strategic contact which may occur. Moreover, categorizing aspects as
strengths, weaknesses, opportunities and threats might be very subjective as there
is great degree of uncertainty in market. SWOT Analysis does stress upon the
significance of these four aspects, but it does not tell how an organization can
identify these aspects for itself.
There are certain limitations of SWOT Analysis which are not in control of
management. These includea. Price increase;
b. Inputs/raw materials;
c. Government legislation;
d. Economic environment;
e. Searching a new market for the product which is not having overseas market
due to import restrictions; etc.

Internal limitations may includea. Insufficient research and development facilities;

b. Faulty products due to poor quality control;
c. Poor industrial relations;
d. Lack of skilled and efficient labor; etc

SWOT- IN LEADERSHIP
A SWOT analysis guides you to identify the positives and negatives inside your
organization (S-W) and outside of it, in the external environment (O-T). Developing
a full awareness of your situation can help with both strategic planning and
decision-making.
The SWOT method (which is sometimes called TOWS) was originally developed for
business and industry, but it is equally useful in the work of community health and
development, education, and even personal growth.
SWOT is not the only assessment technique you can use, but is one with a long
track record of effectiveness.

When do you use SWOT?

A SWOT analysis can offer helpful perspectives at any stage of an effort. You
might use it to:

Explore possibilities for new efforts or solutions to problems.

Make decisions about the best path for your initiative. Identifying your
opportunities for success in context of threats to success can clarify
directions and choices.
Determine where change is possible. If you are at a juncture or turning point,
an inventory of your strengths and weaknesses can reveal priorities as well
as possibilities.
Adjust and refine plans mid-course. A new opportunity might open wider
avenues, while a new threat could close a path that once existed.

SWOT also offers a simple way of communicating about your initiative or program
and an excellent way to organize information you've gathered from studies or
surveys.
Listing Your Internal Factors: Strengths and Weaknesses (S, W):
Internal factors include your resources and experiences. General areas to consider
are:

Human resources - staff, volunteers, board members, target population

Physical resources - your location, building, equipment (Does your building
have a prime location? Does it need renovations?)
Financial - grants, funding agencies, other sources of income
Activities and processes - programs you run, systems you employ
Past experiences - building blocks for learning and success, your reputation
in the community

Don't be too modest when listing your strengths. If you're having difficulty naming
them, start by simply listing your characteristics (e.g., we're small, we're
connected to the neighborhood). Some of these will probably be strengths.
Although the strengths and weakness of your organization are your internal
qualities, don't overlook the perspective of people outside your group. Identify
strengths and weaknesses from both your own point of view and that of others-those you serve or deal with. Do others see problems-or assets-that you don't?
How do you get information about how outsiders perceive your strengths and
weaknesses? You may know already if you've listened to those you serve. If not,
this might be the time to gather that type of information. See "Related Sections"
for ideas on conducting focus groups, user surveys, listening sessions, and
meetings.

Listing External Factors: Opportunities and

Threats (O, T)
Cast a wide net for the external part of the assessment. No organization, group,
program, or neighborhood is immune to outside events and forces. Consider your
connectedness, for better and worse, as you compile this part of your SWOT list.
Forces and facts that your group does not control include:

Future trends - in your field (Is research finding new treatments?) or the
culture (Do current movies highlight your cause?)

The economy - local, national, or international

Funding sources - foundations, donors, legislatures

Demographics - changes in the age, race, gender, culture of those you serve
or in your area

The physical environment (Is your building in a growing part of town? Is the
bus company cutting routes?)

Legislation (Do new federal requirements make your job harder or easier?)

Local, national or international events

As a tool designed for businesses, the major threat to success for most SWOT
practitioners is "the competition." Programs to improve the health and well being
of individuals and communities might not have competitors in the market sense,
but there could be overlap in services with other agencies that you need to
consider. Or, perhaps preferences for funding aren't favoring you--you're
interested in health promotions, but treatment is getting all the resources.
So it can help to think of the "competition" in a broad sense as you consider
threats to your effort. Perhaps the competition for your target population's time
and attention exists in a competing unhealthy habit, such as smoking, or in a
societal force like tobacco advertising, or even in the lure of couch and TV, which
occupy time that might be given to exercise.