Using SWOT Analysis to Formulate Strategy
SWOT Analysis is a powerful technique for understanding your Strengths and Weaknesses, and for looking at the Opportunities and Threats you face. SWOT analysis is one of the most important steps in formulating strategy. In SWOT analysis, the best strategies accomplish an organization's mission by exploiting an organization's opportunities and strengths while neutralizing its threats and avoiding its weakness. (Griffin, 2003) By looking at yourself and your competitors using the SWOT structure, you can start to craft a strategy that helps you differentiate yourself from your competitors, so that you can compete successfully in your market. This helps you to focus on your strengths, minimize
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Managers frequently use SWOT analysis to introduce realism and greater objectivity into their internal analysis. SWOT Analysis is a useful and powerful tool for mapping the way forward for businesses. However it's only one of the tools you'll need to lead your team to an inspiring and successful future. A SWOT analysis looks at future possibilities for the organization through an orderly approach of introspection into both positive and negative concerns. It is a relatively simple way of communicating ideas, policies, and concerns to others. It can help administrators to quickly expand their vision. In order to be most effectively used, a SWOT analysis needs to be flexible. Situations change with the passage of time and an updated analysis should be made frequently. SWOT is neither bulky nor time-consuming and is successful because of its simplicity. Used creatively, SWOT can form a foundation upon which to construct numerous strategic plans. (Glass, 1991) While useful for reducing a large quantity of situational factors into a more manageable profile, the SWOT framework has a tendency to oversimplify the situation by classifying the firm's environmental factors into categories in which they may not always fit.
The results of SWOT analysis, which are presented in a 2x2 matrix, are largely descriptive. The matrix contains a listing of organizational strengths, weaknesses, opportunities, and threats that are usually the