We face a bunch of challenges and risks while working in a business setting. Those, who are able to take the right decisions at the right time are successful in their particular area. The management science suggests the use of some models that can help a manager take good decisions. One of such models is SWOT Analysis. The word SWOT is an abbreviation of Strengths, Weaknesses, Opportunities, and Threats.
SWOT analysis is used to understand the internal and external forces that are essential for a company’s strategy development in the marketing industry. The intensity of these factors changes with time and gives the company an idea of how to strengthen its roots in the market and use the threats as an opportunity.
A typical SWOT Analysis is a combination of Internal Analysis and External Analysis. Mean to say, it just analysis the internal and external environment. Although SWOT Analysis has been around for quite some time; it has evolved over time due to rapidly changing the business landscape. Some researchers suggest that SWOT should now be read as TOWS. TOWS is an abbreviation of Threats, Opportunities, Weaknesses, and Strengths. It is just a rearrangement of the word SWOT. The four components of SWOT analysis are explained below;
Every business has some strengths that support it in all operations. More strengths mean bigger span of control over the market. It a business is in a strong position, it is not easy to take market share from it. Economies of scale and loyal customers are some strengths.
Even global companies have some weaknesses that are not good for businesses. Managers need to point out the weaknesses of a business so that the business get strong. Easy to copy formulas and lose control on market are notable weaknesses a business needs to avoid.
Opportunities come and go; it is our job to avail an opportunity that could benefit our business. An ease in the government regulations and the decrease in the price of raw materials are characterized as opportunities.
There are some factors in the market threaten businesses. No business is free from internal and external threats. It is the job of the managers to keep an eye on such important factors that negatively affect their business.
Now that we have come to know how important SWOT analysis is in the corporate world. Conducting a SWOT analysis for a business takes the time to complete because it is a comprehensive analysis of the internal and external environment. If you want to learn more about the latest SWOT analysis of Fortune 500 companies, we suggest you keep reading this blog because we keep adding fresh SWOT analysis of Fortune 500 companies. See you very soon!