A SWOT analysis however, is a strategic planning tool which helps managers evaluate and analyze the chances a certain project or decision has for success. The SWOT framework gets managers thinking about everything that potentially could impact the success of a new project. Managers use the SWOT analysis as a key tool to conduct an internal and external scan of the business environment. Therefore, the strategic themes identified by the SWOT analysis should point managers in the direction of major initiatives to pursue. The better the business SWOT analysis is linked to the ultimate strategy, the more successful the business can be.
A SWOT analysis can be used at many stages in the strategic planning process; it can be used in the establishment of a baseline assessment, in refining the thinking for the future vision or to assist in brainstorming on possible strategies to achieve the future vision.
Advantages of SWOT analysis in strategic planning
Each stage of the SWOT analysis provides advantages in the process of strategic planning.
- Strengths – the element of strengths allows the business to take into consideration the business’ competitive advantage in the market; such competitive advantages are the focal point of the business’ operations and strategic planning. For example companies that have manufacturing and production quality as strengths, promote themselves as having high quality brands.
- Weaknesses – by assessing the business’ weaknesses it allows management to understand such weaknesses and makes it easier to deal with these weaknesses. The company is then in a position to work at improving weaknesses or realizes that such weaknesses are part of the whole business approach.
- Opportunities – this element is critical to the development of company strategies as it identifies areas or ways in which to improve and grow the company. By constantly reviewing market opportunities it allows the company to take advantage of emerging markets or changes that the company has the strength to match. However, the key is to constantly review markets so as not to miss such opportunities.
- Threats – by analyzing threats to the business it helps the company protect itself or buffer itself as much as possible from external threats. Company leaders are in a better position to prepare or decide on how to deal with or respond to such threats from a strategic point of view.
The SWOT analysis is an integral part of the company’s planning process as it provides a holistic and overall view of the current and forward looking situation.
In order to benefit from using SWOT analysis in your company’s strategic planning process find a strategic planning SWOT template for your business today.