Science, Special Report, Americas

[Asmqzwl]

SWOT analysis should be kept realistic, simple and short. It should avoid complications and too-deep analysis, as much of the information is subjective. Therefore, it should be used as a guide and not a prescription. Strengths accounts for what an organization is good at, helping in deciding on factors that gives a competitive advantage. For instance, a hedge fund might have developed a proprietary trading strategy that returns excellent results as compared to its competitors. It must then think of ways to attract new investor capitals through the superior results. Weaknesses are the hurdles an organization faces when operating at its optimum level. Such factors have the potential to decrease progress or to direct a competitive edge towards the competition. An organization should always try to minimize weaknesses. Assess how they can be improved. Examples of weaknesses are an inadequate supply network or lack of capital. Opportunities are those external factors that favor an organization to gain advantage. If used efficiently, such factors have the potential to develop a competitive advantage. For instance, an automobile manufacturer might be able to export its cars into a new market if taxes in a country are substantially reduced. This will result in increased sales and market share, which will help in creating a competitive advantage in terms of scale. Threats are the factors that can negatively affect an organization. For instance, a drought is a threat to a wheat-producing company, as it may reduce or destroy the yield of a wheat crop. Market share will decrease. A competitor might gain on it. It is important for an organization to have a proper contingency plan that effectively tackles potential threats.




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