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SWOT Analysis; Meaning, Advantages and Disadvantages

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One of the most widely used strategic planning tools is a SWOT analysis. All the companies use it in different forms. SWOT analysis is often used as a basic guide for strategic planning. The worth of SWOT analysis is often dependent on the objective insight of those management individuals who conduct the swot analysis. If management can provide objective, relevant information for the analysis, the results are extremely useful for the company.

The term SWOT analysis is the acronym made up four words, i.e. strengths, weakness, opportunities and threats. The first two variables are internal to an organisation whereas the last two are external. The value of SWOT analysis cannot be overemphasised. It is rightly said that the winners recognise their limitations but focus on their strengths, losers recognise their strength but focus on their limitation. Positive thinking is strength whereas negative thinking acts as a weakness.

Every individual can make a list of his positive points and negative points. A weakness can be converted into a strength by recognising it and by making an effort in that direction. In the same way, it is important to be aware of the opportunities that come to us at various point of time, and there are also threats that come from the competitors.


  • It reflects the current status of the company whether the business is going healthy or not.
  • It becomes easy to understand the factors that might be internal or external which affects the success or failure of the organisation.
  • It is helpful to form the strategy to prepare for the possible threats from the competitors.
  • It evaluates the business environment in a detailed manner to take strategic decisions for the future course of action.
  • In India, the importance of swot analysis has further increased after the implementation of liberalisation, privatisation and globalisation. There is now a two-fold competition to our own business.


The swot analysis assesses the strength, weakness, market opportunities and threats to give competitive knowledge to the potential and discriminating issues that affect the general accomplishment of the business. Another essential objective is to recognise and allow all huge variables which could affect the accomplishment to one of the four classifications, providing a goal and a comprehensive look at your business.

Following are the variables:


Positive traits in your business which are under control. Strengths frequently incorporate resources, variable benefits, the positive parts of those in your workforce and the perspectives identified with your business. It makes you concentrate on all the internal segments that add significance or present you a competitive lead.


These are the factors that are in control, but they bring down the capacity to get or keep up an aggressive edge such as imperfect expertise, restricted access to liabilities or innovation, the absence of resources, substandard services. Weaknesses reduce the effectiveness of the services or the products you are providing. This class can be to a great degree supportive in giving a hierarchical appraisal if you concentrate on precise identification of the company’s weaknesses.


These are the external factors that symbolise the incentive for the business for the survival and to thrive in a market. These variables incorporate the opportunities that can make the business to earn more profits and to gain success through its competitive advantage. You need to identify those opportunities for the betterment of the organisation. All you need to think about is timing and work accordingly.


These are the external factors that are not under the control of the organisation, and it is beyond the abilities, that can put your marketing methods or the whole business at threat. The most essential and pervasive threat is a rivalry. On the other hand, different dangers are there that incorporate unsustainable cost increment by suppliers, expanded government regulation, financial downturns that makes the service or the products outdated.

Despite the fact that these forces are outside and hence outside your ability to control, SWOT analysis might likewise support in the formation of alternate arrangements that will empower you to rapidly and successfully addresses these issues if they crop up.


The initial phase of the business administration SWOT analysis recognises key strengths of an organisation. These strengths can incorporate a strong brand picture, a lot of working capital, a great status among consumers and even strong dissemination systems. Strength is fundamentally any benefit than an organisation has over its real rivals. Nevertheless, companies ought to additionally break down the strengths of their rivals too, which gives a superior appraisal of how an organisation can get along in the marketplace.


Swot analysis gives an acceptable perspective of your strengths and permits you to expand on them to meet your business target.

  • It depicts the weaknesses and gives an opportunity to overturn them.
  • It provides for you a sneak peek into the opportunities that dwell ahead. Utilizing this, you can draft your vital development arrangements focusing on the weakness and strength.
  • It helps us to examine conceivable threats to your business, and roll out essential improvements to the business arrangements and develop plans. Moreover, it encourages making supplementary or optional plans, emergency arrangements and so on.
  • It helps you to utilise a methodology to match your strength and opportunities, use those methods for changing over the weakness and threats into the strength and opportunities.
  • The complete SWOT analysis methodology brings to light your resources and gives inspiration and the essential drive to continue your marketing strategies in spite of all odds.


  • The general swot marketing strategy could be misdirecting or unreasonable due to the accompanying variables.
  • If the inappropriate information is utilised to break down swot analysis, wrong choices can be made.
  • The external examination may not be correct; as outside variables are not in your control.
  • This methodology includes lots of resources and expense.
  • The analysis could be one-sided if internal groups wish to showcase just their group’s strengths and not weaknesses.

It is important to recollect that the individual who performs the investigation can prejudice SWOT analysis. So it will be a good idea to have an outside business specialist for auditing the results to give most of the target plans.

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