SWOT analysis is a Structured Planning method used to evaluate the Strengths, Weaknesses,Opportunities, and Threats involved in a Project or in a Business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute in the 1960’s and 1970’s using data from Fortune 500 companies.
Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization.
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- Strengths: characteristics of the business or project that give it an advantage over others
- Weaknesses: are characteristics that place the team at a disadvantage relative to others
- Opportunities: elements that the project could exploit to its advantage
- Threats: elements in the environment that could cause trouble for the business or project
Identification of SWOT is important because they can inform later steps in planning to achieve the objective. First, the decision makers should consider whether the objective is attainable, given the SWOT. If the objective is not attainable a different objective must be selected and the process repeated.Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category (strengths, weaknesses, opportunities, and threats) to make the analysis useful and find their competitive advantage.
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