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Personally I believe everyone should make this is analysis not only in business but also in other fields? I use it all the time, even when I go shopping. Of course it is necessary to know the strengths and weaknesses and to identify your opportunities and threats, but WHY?
Dear Mr. Mayaleh,
Thank you for this valuable question.
In few words and my perspective the SWOT help us to develop short-term and long-term strategies for business even for existing or new business.
As time passes, lots of changes occur in the external business environment and the internal environment that can have positive and negative impacts on business organizations. SWOT analysis enables you to analyse these positive and negative impacts separately due to internal and external environment. The analysis helps you to formulate future business strategies that leverage your strengths and opportunities, considering your weaknesses and thethreats that you face. It enables you to focus on your weaknesses so that these can be eliminated by various means if possible like training, adoption of new technology, product innovation etc. SWOT analysis provides a good platform to involve people from multiple disciplines to give their creative ideas before framing sound business strategies. This helps in gaining the cooperation/ acceptance of people.
To answer the WHY ?
There is a beautifull quote from Adam Smith , a political economist " The first thing you have to know is yourself . A man who knows himself can step outside himself and watch his own reactions like an observer"
SWOT helps one to know oneselves , be it a man or an organisation , SWOT would equip them for a better way forward by making better decisions.
To access , evaluate resources, capabiliies, positioning and penetration abilities of your company or product. With out these you cant acieve long term goals.
It tells you where you are currently and in which situation and where you can be in future and in which situation.
Helps you analyse internal and external strengths, weaknesses, opportunities and threats. It acts as the foundation to help you draw your strategy and justify the need for improvements.
Done by an external party, "benefits" of SWOT analysis are so you may see how the company reacts to different industrial/economy conditions compared to other companies. It can give you a good indicator of the company's longevity, market share/influence, and adaptability to changing circumstances.
internally, the company usually has much more complex tools to make more precise strategic decisions regarding growth, expansion, reaction to threats, market competition, etc.
It has several benefits , the most I like about it enables a business manager to articulate the precise situation of the organization , whether it is vulnerable or competent .
