In today’s business scenario SWOT analysis plays a pivotal role, much of the business decision depends on this analysis. The concept was coined and developed by Prof. Albert Humphrey, who led a research at the Stanford University, the purpose of the research was to identify the reason behind the failure of corporate planning.
SWOT analysis is the procedure by which an organisation takes the initiative to identify its internal strength and weaknesses and also the external factors like opportunity and threats. SWOT matrix stands for strength, weakness, opportunity, and threat.
It is an important tool used by managers in combination with a few other tools to analyse the positive and the negative of a business or an organisation. Many prominent researchers have the opinion that SWOT analysis alone is meaningless. And if you go deep into the subject, you would realise that the conclusion drawn is true and empirical.
Overview of SWOT
The SWOT Matrix
If you are a marketer or an avid learner, you will have to learn about SWOT as an integral part of strategic analysis. It has a very diverse implication, you can use it to analyse any number of things, we sometimes use it to analyse our blog and our company as a whole, obviously!
SWOT is also known as the TOWS Matrix; have a look at the graph below:
|Opportunity||S – O Strategy||W – O Strategy|
|Threat||S – T Strategy||W – T Strategy|
- S – O Strategy is the strategy that utilises the strength of a company to pursue the opportunities that are present.
- W – O Strategy is to pursue the opportunity by overcoming the weakness of the company.
- S – T Strategy identifies the areas where the company can utilise its strengths to overcome the weakness that is persisting in the business environment.
- W – T Strategy is the most defensive strategy among all of the strategies. Over here the focus of the company will be to minimise the weakness and to avoid any threat.
SWOT can be used in just about any field, it is a tool most used in strategic analysis by strategists because it gets the conversions; Let me list a few of its applications:
- It can be used to find solutions to any of your business problems.
- It can help in clarifying the direction and help the decision-making process by identifying the opportunity and keeping in check the threat that the business is facing or might face in the near future.
- It can assist in determining the changes required in the business.
What’s the bottom line?
SWOT is a very important tool, be it any kind of business, organization or any institution; it has implications everywhere, Swot Analysis is a part of Marketing.