Please define and give an example of the use of SWOT analysis.?
Answer:
SWOT analysis is an analysis on the company's strengths and weaknesses (internal) and opportunities and threats (external).
Strengths and weaknesses will refer to the company's own strengths and weaknesses. For example, what products/services does the company provides that gives it commercial advantage over other competitors. It doesn't just have to be great products/services, but also good R&D progress, great brandname, good investments, competitive team of management, etc.
And also what weaknesses the company is facing that may affect it commercially and financially. For example, some very common weaknesses are internal politics (conflicts between workers), unorganized company structure, bad corporate governance, corruption among the executives, inadequate R&D, etc.
Opportunities will refer to what the company have from the market that will benefit the company. For example, it may be growth in market consumption, reduction in taxes, competitors taking a dive, etc.
Threats will be aspects like economic regression, competitors getting better hold of the market, etc.
SWOT analysis is important for the company so that it knows where it is heading. And if it's heading the wrong way, will it be because of too much weaknesses, too few strengths, too few opportunities and too much threats? If so, then which area need further improvements?
SWOT = STRENGTH WEAKNESS OPPORTUNITES AND THREATS
Strength and Weakness would be the internal factors of an organization
Opportunities and Threats are connected to the external factors of an organization.
Example;
Strength; Organization's management, reputation, resource available
Weakness; Strategy plot, mis-management, over budget expenditure, unknown to commuinity or market
Opportunities; Mergers, Political influence, economy law
Treath: Competitors
SWOT means strength, weakness, opportunities and threats. This is used by all business at every stage. By doing a SWOT analysis the company is able to understand the market and can then make sound business decisions. SWOT analysis is mostly done when a new product is to be launched in the market. The company is able to understand the market better and thereby foresee the pitfalls.
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