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Advantages of swot analysis

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Dhivya S Dhvi
Dhivya S Dhvi

SWOT analysis is a tool that helps organizations develop strategic plans. It involves identifying the organization's strengths, weaknesses, opportunities, and threats. This provides information to leverage strengths, address weaknesses, seize opportunities, and mitigate threats. Some limitations include subjectivity in categorization and not addressing how to identify the four aspects. Effective strategic leaders display traits like loyalty, maintaining awareness, having a wide perspective, providing motivation, showing compassion, self-control, social skills, self-awareness, and being willing to delegate responsibilities.

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Advantages of SWOT Analysis SWOT Analysis is instrumental in strategy formulation and selection. It is a strong tool, but it involves a great subjective element. It is best when used as a guide, and not as a prescription. Successful businesses build on their strengths, correct their weakness and protect against internal weaknesses and external threats. They also keep a watch on their overall business environment and recognize and exploit new opportunities faster than its competitors. SWOT Analysis helps in strategic planning in following manner- a. It is a source of information for strategic planning. b. Builds organization’s strengths. c. Reverse its weaknesses. d. Maximize its response to opportunities. e. Overcome organization’s threats. f. It helps in identifying core competencies of the firm. g. It helps in setting of objectives for strategic planning. h. It helps in knowing past, present and future so that by using past and current data, future plans can be chalked out. SWOT Analysis provide information that helps in synchronizing the firm’s resources and capabilities with the competitive environment in which the firm operates. SWOT ANALYSIS FRAMEWORK Limitations of SWOT Analysis SWOT Analysis is not free from its limitations. It may cause organizations to view circumstances as very simple because of which the organizations might overlook certain key strategic contact which may occur. Moreover, categorizing aspects as strengths, weaknesses, opportunities and threats might be very subjective as there is great degree of uncertainty in market. SWOT Analysis does stress upon the significance of these four aspects, but it does not tell how an organization can identify these aspects for itself. There are certain limitations of SWOT Analysis which are not in control of management. These include- a. Price increase; b. Inputs/raw materials; c. Government legislation; d. Economic environment; e. Searching a new market for the product which is not having overseas market due to import restrictions; etc. Internal limitations may include- a. Insufficient research and development facilities; b. Faulty products due to poor quality control; c. Poor industrial relations; d. Lack of skilled and efficient labour; etc
Leadership: The main objective of strategic leadership is strategic productivity. Another aim of strategic leadership is to develop an environment in which employees forecast the organization’s needs in context of their own job. Strategic leaders encourage the employees in an organization to follow their own ideas. Strategic leaders make greater use of reward and incentive system for encouraging productive and quality employees to show much better performance for their organization. Functional strategic leadership is about inventiveness, perception, and planning to assist an individual in realizing his objectives and goals. A few main Traits / Characteristics / Features / Qualities of Effective strategic leaders that do lead to superior performance are as follows:  Loyalty- Powerful and effective leaders demonstrate their loyalty to their vision by their words and actions.  Keeping them updated- Efficient and effective leaders keep themselves updated about what is happening within their organization. They have various formal and informal sources of information in the organization.  Have wider perspective/outlook- Strategic leaders just don’t have skills in their narrow specialty but they have a little knowledge about a lot of things.  Motivation- Strategic leaders must have a zeal for work that goes beyond money and power and also they should have an inclination to achieve goals with energy and determination.  Compassion- Strategic leaders must understand the views and feelings of their subordinates, and make decisions after considering them.  Self-control- Strategic leaders must have the potential to control distracting/disturbing moods and desires, i.e., they must think before acting.  Social skills- Strategic leaders must be friendly and social  Self-awareness- Strategic leaders must have the potential to understand their own moods and emotions, as well as their impact on others.  Readiness to delegate and authorize- Effective leaders are proficient at delegation. They are well aware of the fact that delegation will avoid overloading of responsibilities on the leaders. They also recognize the fact that authorizing the subordinates to make decisions will motivate them a lot.
Advantages of swot analysis

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Advantages of swot analysis

  • 1. Advantages of SWOT Analysis SWOT Analysis is instrumental in strategy formulation and selection. It is a strong tool, but it involves a great subjective element. It is best when used as a guide, and not as a prescription. Successful businesses build on their strengths, correct their weakness and protect against internal weaknesses and external threats. They also keep a watch on their overall business environment and recognize and exploit new opportunities faster than its competitors. SWOT Analysis helps in strategic planning in following manner- a. It is a source of information for strategic planning. b. Builds organization’s strengths. c. Reverse its weaknesses. d. Maximize its response to opportunities. e. Overcome organization’s threats. f. It helps in identifying core competencies of the firm. g. It helps in setting of objectives for strategic planning. h. It helps in knowing past, present and future so that by using past and current data, future plans can be chalked out. SWOT Analysis provide information that helps in synchronizing the firm’s resources and capabilities with the competitive environment in which the firm operates. SWOT ANALYSIS FRAMEWORK Limitations of SWOT Analysis SWOT Analysis is not free from its limitations. It may cause organizations to view circumstances as very simple because of which the organizations might overlook certain key strategic contact which may occur. Moreover, categorizing aspects as strengths, weaknesses, opportunities and threats might be very subjective as there is great degree of uncertainty in market. SWOT Analysis does stress upon the significance of these four aspects, but it does not tell how an organization can identify these aspects for itself. There are certain limitations of SWOT Analysis which are not in control of management. These include- a. Price increase; b. Inputs/raw materials; c. Government legislation; d. Economic environment; e. Searching a new market for the product which is not having overseas market due to import restrictions; etc. Internal limitations may include- a. Insufficient research and development facilities; b. Faulty products due to poor quality control; c. Poor industrial relations; d. Lack of skilled and efficient labour; etc
  • 2. Leadership: The main objective of strategic leadership is strategic productivity. Another aim of strategic leadership is to develop an environment in which employees forecast the organization’s needs in context of their own job. Strategic leaders encourage the employees in an organization to follow their own ideas. Strategic leaders make greater use of reward and incentive system for encouraging productive and quality employees to show much better performance for their organization. Functional strategic leadership is about inventiveness, perception, and planning to assist an individual in realizing his objectives and goals. A few main Traits / Characteristics / Features / Qualities of Effective strategic leaders that do lead to superior performance are as follows:  Loyalty- Powerful and effective leaders demonstrate their loyalty to their vision by their words and actions.  Keeping them updated- Efficient and effective leaders keep themselves updated about what is happening within their organization. They have various formal and informal sources of information in the organization.  Have wider perspective/outlook- Strategic leaders just don’t have skills in their narrow specialty but they have a little knowledge about a lot of things.  Motivation- Strategic leaders must have a zeal for work that goes beyond money and power and also they should have an inclination to achieve goals with energy and determination.  Compassion- Strategic leaders must understand the views and feelings of their subordinates, and make decisions after considering them.  Self-control- Strategic leaders must have the potential to control distracting/disturbing moods and desires, i.e., they must think before acting.  Social skills- Strategic leaders must be friendly and social  Self-awareness- Strategic leaders must have the potential to understand their own moods and emotions, as well as their impact on others.  Readiness to delegate and authorize- Effective leaders are proficient at delegation. They are well aware of the fact that delegation will avoid overloading of responsibilities on the leaders. They also recognize the fact that authorizing the subordinates to make decisions will motivate them a lot.