Importance of swot analysis
| Importance of swot analysis |
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Importance of SWOT Analysis - SWOT Analysis is very important if it comes to staring new projects, development, monitoring current state and implementing changes. The tool allows multidimensional analysis of current subject's condition, including internal (usually controllable) and external (usually uncontrollable or difficult to control) factors to maximize the benefits, minimalize negative consequences of certain actions and, the most important, verify whether the objective is attainable. Each proper prepared section can provide clear insight into controllable and uncontrollable factors which requires adequate effort. Sticking to the analysis plan can be helpful due to focus on the significant areas, setting a realistic objective, organize work and creating as detailed strategy as possible, leaving less room for unpredictable aftermath, verifying environment data and information, internal (strengths, weakness) and external (opportunities, threats). SWOT Analysis is one sufficient technique which helps to gain insight into the past and find solutions for sake of current or future blemish, useful for an existing company as well as a new plan. SWOT analysis helps to reduce weaknesses, while maximizing strong sides of the company. SWOT Analysis can also be used when it comes to accomplishing a specific goal in non-profit organizations or private company. The tool may be used to create a reconsideration during the study.
Results of SWOT analysis
Importance of SWOT analysis results from effects which can be obtained by making better and more efficient management decisions. Most important results of SWOT analysis are:
- more efficient strategic decisions
- better strategic planning process
- efficient resource utilisation and allocation
- higher revenue growth and profits
- better chance to discover potential opportunities and react to risks
- easy framework to identify strengths (key success factors) and weaknesses (areas to improve)
- it is easy methodology widely used, popular and taught in every management school
Strategy building
SWOT Analysis can be used to build an organizational or personal strategy. We will investigate internal and external factors (the most common is 2x2 matrix), to deduce what is the relationship between them.
Strong relationships between strengths and opportunities can inform us about the good condition of the company and suggest using an aggressive strategy. On the other hand, strong links between weaknesses and threats can be perceived as a warning and refer to use of a defensive strategy.
References
- Coman, A., & Ronen, B. (2009). Focused SWOT: diagnosing critical strengths and weaknesses. International Journal of Production Research, 47(20), 5677-5689.
- Ifediora C.O., Idoko O.R. and Nzekwe J.(2014). Organization’s stability and productivity: the role of SWOT analysis an acronym for strength, weakness, opportunities and threat..
- Kajanus M., Leskinen P., Kurttila. M, Kangas J. (2012). Making use of MCDS methods in SWOT analysis—Lessons learnt in strategic natural resources management..
- Ommani A. R. (2011). Strengths, weaknesses, opportunities and threats (SWOT) analysis for farming system businesses management: Case of wheat farmers of Shadervan District, Shoushtar Township, Iran..
- Valentin, E. K. (2001). SWOT analysis from a resource-based view. Journal of marketing theory and practice, 9(2), 54-69.
- SWOT analysis @Wikipedia
Author: Martyna Miszczak
