SWOT stands for Strengths, Weakness, Opportunities and Threats. SWOT analysis is usually done for business, project or individual personality.
- The identification of strengths, weaknesses, opportunities and threats helps in forming a more fact-based intervention strategy with fresh ideas to tackle problems.
- The analysis provides a base for forming strategic planning, examining external or internal factors as well as deciding future potential.
- SWOT analysis works only when weightage is given to a diverse population within the organization and all views taken into account
Components of SWOT analysis
The following are the components of the SWOT analysis:
- Strengths: It represents the strengths of a company and its unique features. These unique features separate it from its competitors. It can be anything from a loyal customer base to a strong balance sheet.
- Weaknesses: These are the points where a company is not functioning optimally. Improvement is needed in these areas to remain competitive and relevant. weakness can be a weak brand, high debt or lack of capital.
- Opportunities: This looks for new schemes or techniques to increase sales or business. Like cutting export tax rates or reduction in material and labour costs.
- Threats: This pinpoints factors which are detrimental to business like rising raw material costs, labour charges and taxes.
A SWOT table looks like a square with four quadrants that are dedicated to each of the components. The top row of S and W represents internal factors and the bottom row of O and T represents external factors. The right row of S and O represents the positive factors and the left row of W and T represents the negative factors.