The technique of SWOT analysis involves constructing a grid of four quadrants (one quadrant labelled for each factor). A group of people (generally of managerial status or above) then come together to identify and generate items which fall into each of the four factors. By involving groups of people in the SWOT process it is possible to gain access to information that may otherwise not be available and consequently, SWOT analysis is a form of brainstorming.
Drawing up a grid and limiting the list of items to those that matter, focuses attention on to the key issues and enables a summary of the key strengths, weaknesses, opportunities and threats to emerge. For example, through using SWOT analysis on a company's communication, a perspective can be gained of what needs to change or develop and what effective commodities need to remain (Williams, 1996). The research therefore suggests that SWOT analysis is useful in helping to asses a situation. It also has use in comparing alternatives when making a decision, and thus can be used in forming a business strategy.
Most of the literature concerning SWOT analysis is found within the field of strategic management. In deciding upon a strategy, SWOT analysis is used to look at the organization's current performance (strengths and weaknesses) and what factors in the external environment (opportunities and threats) might affect the organization's future.
Thompson (1994) defines the four factors of SWOT analysis in relation to strategic management. The opportunities that need to be identified are those which can be maximised to 'fit the organization's values and resources'. The important threats are ones that the organization is not well equipped to deal with. The key strengths relate to elements of success such as a strong competitive position. In contrast, key weaknesses are those which prevent the organization from achieving that competitive advantage (Thompson 1994).
The suitability of an option should relate to how well it overcomes the difficulties identified (resource weaknesses and environmental threats) and if it exploits the company strengths and environmental opportunities (Johnson and Scholes, 1984). Within corporate planning and strategic management, SWOT analysis should only focus on 'the crucial issues considered to represent the major factors in relative success or failure over the next 5,10, or even 20 years' (Cole, 1986).
In addition to examining current performance and predicting future success, SWOT analysis can also be used to analyse past failures. Consequently, it is claimed that the real value of a SWOT analysis lies in the implications that arise from it as opposed to the actual solution itself (Clarke-Hill & Glaister, 1991).
Apart from its broader organizational application SWOT analysis can also have personal use for individuals. Buhler (1997) argues for the use of SWOT analysis in career management, claiming that individuals need to know their own strengths so that their 'competitive advantage' can be built upon these. Identifying weaknesses highlights areas that need to be improved and developed. Opportunities are identified by studying the environment (recruitment advertisements, newspapers) and discovering what is available (e.g. appropriate positions, a gap in the market). The threats are aspects which prevent career goals being attained, identifying opportunities and threats enables better preparation (for interviews, business plans). The strengths must then be matched with the opportunities identified, and the chosen opportunities should be those which minimise the threats. Buhler (1997) maintains that a SWOT analysis helps the individual to form a career strategy and highlights and direction to take so that these goals can be met.
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