What is SWOT Analysis ?

In this era of rapid development, everything seem to be changing rapidly. Every business is try to find the best and effective strategy to meet clients' needs in order to maximize their profit. Most of the company make their strategy based on the analysis of current situation and future trend and there are many approach can be used in analyzing. So, today I wanna share something about SWOT analysis because this technique is a simple and powerful tool that could help you to develop your business strategy. Through SWOT analysis, you can have a better understanding about the strengths, weaknesses, opportunities and threats of your business. Besides that, you can also know what are the internal and external factors that effecting the growth of your business.

Strengths refer to the organization internal factor or resources that can help in developing one's company. It could be the advantages or capabilities that held by a company and this can improve the competitive strength of a company. Example:

• Skillful, efficient and positive attitude employees
• Sufficient capitals to pay off the short term debt
• Advanced technology equipment
• Reputation for quality

Weaknesses refer to the organization internal factor or resources that will cause damage to development of a company. Weaknesses could be something intangible as well. Undoubtedly, most of us don't like to acknowledge the weaknesses we have but be honesty. We have to be realistic and face any unpleasant truth when we using SWOT. After we found out our weaknesses, we have to find the effective way to solve it because weaknesses are something we can change and control compared to something we can't. Example:

• Limited raw material
• High cost of production
• Poor quality products
• Lack of professional employees

Opportunities refer to organization external factor that could help company to achieve their goals. Opportunities are different from the strengths because strengths refer to something that we can change or control whereas opportunities refer to something that effected by others so we can't change or control. We have to realize what opportunities exist in the market or the environment that we can benefit from. If we are able to discover the opportunities then it will make a huge difference to company's ability to compete in the market. Example:

• The increasing demand for company's products or services
• Few competitors in markets
• New technology
• New market

Threats refer to organization external factor that could give negative effect and slow down the development of a company. Think about what are the obstacles you face in getting your product into market and selling. It is vital to figure out these all threats and take action to solve it before you fall victim. After figure out the threats, you should think about whether to change the organization's emphasis to meet the challenge or not. Example:

• Economic slowdown
• Emerging competitors
• Adverse government policy 
• Changing needs of customer 

SWOT analysis is a simple and useful tool to analyze your organization's strengths, weaknesses, opportunities and threats. When you carry out your analysis, be honesty and realistic. Apply it in the right way to avoid gaining wrong information from it. Although SWOT analysis is simple and useful but it also have its limits. The analysis may not include all relevant factors for all four element and it only captures factors at a particular time. Therefore, this analysis technique has its pros and cons. So we have to ensure that we use it in a right way.