SWOT Analysis | Strategic Decision-Making
Q1: Explain SWOT Analysis and how it can be applied to guide strategic decision-making.
Answer:
SWOT Analysis is a strategic tool used to identify a company’s Strengths, Weaknesses, Opportunities, and Threats. It provides a structured approach to assess both internal and external factors impacting the business.
- Strengths: These are internal attributes that give the company a competitive advantage, such as brand reputation, skilled workforce, or proprietary technology.
- Weaknesses: Internal limitations that hinder the company’s performance, such as resource constraints, outdated technology, or weak distribution channels.
- Opportunities: External factors that the company can leverage to grow or improve its market position, like emerging trends, new markets, or regulatory changes.
- Threats: External challenges that could negatively impact the business, including competitor actions, market saturation, or economic downturns.
By identifying these elements, companies can capitalize on strengths, mitigate weaknesses, exploit opportunities, and prepare for potential threats. SWOT analysis aids in strategic decision-making by highlighting areas for improvement and guiding the development of strategies that enhance resilience and competitive positioning.
Q2: What is SWOT Analysis and how does it contribute to strategic planning?
Answer:
SWOT Analysis is a tool used to identify a company’s Strengths, Weaknesses, Opportunities, and Threats. It provides a holistic view of the internal and external factors that affect a business.
- Strengths: Internal factors that give a competitive advantage, such as brand reputation, skilled workforce, or proprietary technology.
- Weaknesses: Internal limitations that hinder performance, like resource constraints or skill gaps.
- Opportunities: External factors that the company can capitalize on, such as new markets, trends, or technological advancements.
- Threats: External challenges like competitor activity, economic downturns, or regulatory changes.
By systematically evaluating these areas, companies can align their resources with market opportunities, mitigate risks, and set priorities in strategic planning.
