Advantages of SWOT Analysis

SWOT analysis is the term used in the context of marketing it is a very important analysis as it helps the company in analyzing the current circumstances in detail and help the company in making strategies to ensure that company is able to fight external threats like competitors as well as its own internal weakness and make use of its strength and take opportunities as and when they arise so as to emerge as winner; full form of SWOT is Strengths, Weakness, Opportunities, and Threats. In order to understand more about SWOT, let’s look at some of the advantages of SWOT –

Advantages of SWOT Analysis

  1. The S Advantage – S in SWOT stands for strength and by analyzing the strengths of the company or the project a company can know about the strong points and invest more money as well more time on those strong points because it is easy to build on strong points rather than trying to make weaker points strong. So for example, if a company specializes in labor intensive work and it forays into information technology sector instead of construction sector then it will be a failure as the company is not working according to its strengths.
  2. The W Advantage – W in SWOT stands for weakness and by analyzing the weakness the company can identify the weak spot or project or people in the company and make sure that competitors do not know about weakness because if they get information about the weak areas of the company then they will target those areas which can result in company losing to its competitors due to its weakness getting exposed. So for example if a construction company has won a highway project and its weakness is its relationship with suppliers of raw materials and if competitor get to know about it then they can use this weakness to make sure that company does not get access to raw material easily which in turn will result in delay in execution of project and can create the wrong image about the company.
  3. The O Advantage – O in SWOT stands for opportunities if the company is able to find or predict opportunities arising in the industry or market than it can prepare for those opportunities in advance and can use its resources to take advantage of such opportunities and make handsome profits out of such opportunities. For example, if the coffee shop owner is serving only coffee and during summer there is a sharp increase in demand for ice creams, now that restaurant owner can take advantage of this opportunity and can sell ice creams along with coffee in summer so as to make profits out of the opportunity.
  4. The T Advantage – T in SWOT stands for threats, in today’s competitive world threat will always be there no matter what business a company is doing, however, the important thing is to identify the threats present in the business and make contingency plan so as to counter such threats. While some threats are beyond the control of the company while for other threats company can prepare a plan to counter such threats. So, for example, a local cloth manufacturer company can make a plan to combat threat in the form of competition from online medium by selling its products through online medium also along with normal channel of sales or take insurance against loss arising from various threats like fire, earthquake, floods etc.., but if suppose government impose some taxes on cloth industry then it is beyond the control of the company.

As one can see from the above that SWOT analysis has many advantages and that is the reason why companies all over the world are conducting SWOT analysis of not only their own company but also on individual projects taken by the company, industries in which company is operating and so on.

0 comments… add one

Leave a Comment

Related pages

define law of diminishing marginal utilityconglomerate company definitionsales promotion advantages and disadvantagesdebentures in hindiconservatism principle in accountingwhat does perpetual succession meanexample of capital reservewhat is the difference between a tariff and a quotaformula of profitability ratiodirect and indirect quotations examplesdefinition of fixed deposit accountcost concept in accountingmixed economy in nigeriaactivity ratios formulabenefits of jitwhat is durable and nondurable goodsdefinition of drawer and draweeoutwards definitionregional rural banks functionscharacteristics of a monopolistic competitionwhat is unearned revenueexamples of primary industriescost based pricing advantages and disadvantagesexample of diminishing marginal utilityurbanisation benefitsdcf methodsnon convertible preference sharesinvestment appraisal payback perioddirect expenses and indirect expenses in accountingfluctuating exchange ratedisadvantages of bills of exchangepaid interest on loan journal entryadvantages and disadvantages of hire purchasetrial balance meaningbenifits of ppfexample of upsellingdifference between systematic and unsystematic riskmarginal diminishing utilityexample of prepaid expensemarket oriented pricing advantages and disadvantagesautocratic leadership pros and consjournal entry for bills payablebenefits of jit manufacturingdistinguish between micro and macro economicconsignee copyadvantages and disadvantages of bank accountsskimmed pricingexplain the difference between fixed and variable costsprivatationsreturn outwardsmoil ipowhat is bill discounting in bankinghow do you prepare a trial balancecurrent cost accounting advantages and disadvantagesadvantages and disadvantages of functional organisational structuremateriality accounting conceptdistinguish between tariff and non tariff barrierskyc abbreviationstrap option strategyficitiousfree floating currency definitionmarginal costing in management accountingexample of inelastic goodsbenefits of jit productiondividends defadvantages and disadvantages of payback methodskimming pricing strategy examplesfeature of monopolistic competitionfdi abbreviationcommand economic system advantages and disadvantagessecuritization of receivablesexamples of complements economicswhat is an example of a vertical mergermerits of privatizationfull form of rrb bankdefine shareholdingjoint venture advantages disadvantagesdebit card wikidiminishing marginal utility examplecharacteristics of monopolistic competition pdftally full form