SWOT Analysis

Another important tool is the SWOT analysis as this helps managers to look at both the external circumstances, the possible Opportunities (O) and Threats (T) that the firm faces and the internal factors, Strengths (S) that the firm can build upon and Weaknesses (W), which the firm need to understand.

A SWOT analysis generates information that is helpful in matching an organisation or group’s goals, programs, and capacities to the social environment in which it operates. It is an instrument within strategic planning, since developing a full awareness of your situation can help with both strategic planning and decision - making.  

Strengths:

- Positive tangible and intangible attributes, internal to an organization. They are within the organisation’s control.

- A resource or capacity of the organisation or team that can be used effectively to achieve objectives now or in the future.

Weaknesses:

- Factors that are within an organisation’s control that detract from its ability to attain the core goal. Which areas might the organisation improve?

- A limitation, fault or defect of the organisation or team that will hinder achievement of objectives now or in the future

Opportunities:

- External attractive factors that represent the reason for an organisation to exist and develop. What opportunities exist in the environment, which will propel the organisation?

- Identify them by their “time frames”.

Threats:

- External factors, beyond an organization’s control, which could place the organization mission or operation at risk. The organization may benefit by having contingency plans to address them if they should occur.

- Classify them by their “seriousness” and “probability of occurrence”.

- Any unfavourable situation in the future, in the market, that is potentially damaging, now or in the future.