1. SWOT analysis- Why is it important?
Summary
SWOT (strengths, weaknesses, opportunities, and threats) is a widely used strategic
planning tool that organisations use to perform a comprehensive and competitive analysis
of various internal and external factors. The result of SWOT analysis helps the organisation
to make effective planning for the future.
SWOT (strengths, weaknesses, opportunities, and threats) is a widely used strategic
planning tool that performs a comprehensive and competitive analysis of the above four
factors of any given organization.
Strengths and weaknesses are internal variables of an organisation, while opportunities
and threats are two external variables. The value of the SWOT analysis often depends on
the objectives of those, who carry out the SWOT test. If they can provide objective,
relevant analysis information, the results are extremely useful for the company.

2. SWOT (strengths, weaknesses, opportunities, and threats) is a widely
used strategic planning tool that performs a comprehensive and
competitive analysis of the above four factors of any given organization.
Strengths and weaknesses are internal variables of an organization,
while opportunities and threats are two external variables. The value of
the SWOT analysis often depends on the objectives of those, who carry
out the SWOT test. If they can provide objective, relevant analysis
information, the results are extremely useful for the company.
It is wisely said, “Winners recognize their limitations but focus on their
strengths; losers recognize their strength but focus on their
limitations.” So, while it is important to focus on potential
opportunities, it is also crucial to recognize possible threat to come out
various issues and problems.

3. SWOT analysis can be used for:
• Strategic planning
• Business planning
• Outsourcing a service, resource, or activity
• Marketing
• Competitor evaluation
• An investment opportunity
• Marketing
• A method of sales distribution
• Product development
• Research reports

5. Strengths and Weaknesses
• Strengths and weaknesses are two internal components of SWOT. For example, intellectual
property is a strength of an organization while low domain authority is a weakness. An
organization needs to identify its strengths and weaknesses in order to work on its strategies.
Opportunities and Threats
• Opportunities and threats are two external components of an organization. For example, building
new business partnership, favourable government policies or regulatory circumstances are some
of the opportunities while entry of a new competitor, slow market growth, unfavourable
government regulations etc. can be recognized as threats. An opportunity represents the reason
why a firm should exist and develop.
Importance of SWOT
• SWOT would be highly effective if its takes every aspect of an organization into consideration. The
real importance of SWOT lies in the following factors-

6. 1.Management gets to learn the current status of their business profile.
2.It helps to develop a strategy to prepare for possible threats from competitors.
3.The SWOT analysis assesses the business environment in detail so that strategic decisions
can be taken for the future.
4.It helps in identifying core competencies of the organizations.
5.The analysis may reveal problems not previously found on a company's radar.
6.It helps to minimize the bad effects of weaknesses while maximizing business strengths.
7.SWOT analysis helps the management to gain insights into the past and find possible
solutions to existing or potential problems for an existing or new business.
8.SWOT analysis provides information that helps to synchronize the company's resources
and capacities with its competitive environment.

7. Key Points
1.SWOT (strengths, weaknesses, opportunities, and threats) is a widely used strategic planning tool that performs a comprehensive and
competitive analysis of the above four factors of any given organization.
2.Strengths and weaknesses are internal variables of an organisation, while opportunities and threats are two external variables.
3.The SWOT analysis assesses the business environment in detail so that strategic decisions can be taken for the future.
4.It helps to minimize the bad effects of weaknesses while maximizing business strengths.
5.SWOT analysis helps the management to gain insights into the past and find possible solutions to existing or potential problems for an
existing or new business.
6.SWOT analysis provides information that helps to synchronize the company's resources and capacities with its competitive environment.
Published by Brainware University