What is a SWOT analysis?

Category: Swot Analysis
Last Updated: 26 Mar 2023
Essay type: Analysis
Pages: 4 Views: 133
Table of contents

SWOT Analysis stands for Strengths, Weaknesses, Opportunities and threats. It is a strategic planning tool which is used by businesses and organization to set a comprehensible rationale of the project. [1]This analysis is not only aimed at analyzing the internal factors but it also scans the external environment. Strengths and weaknesses are usually taken as internal environmental factors while opportunities and threats are viewed as external environmental factors. It helps a company in formulating strategies and utilizes the firm’s resources in the accurate vicinity.

Strengths would highlight the areas where investments should be made to further enhance the product or service and make it as a competitive advantage for the company, e.g. low cost. Weaknesses would tell a firm that improvement is required in a particular area, e.g. weak distribution network. Opportunities would define the areas which are not being targeted by the company and investing in that area would bring chances of growth and profit, e.g. an unmet customer need. There may be some changes in the external environment which can be a threat for a company, e.g. a new substitute product.[2] SWOT analysis should be performed for every area of the businesses and it should be repeatedly done for every market.

What is its purpose in strategic planning?

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Strategic planning basically helps a business to set its overall objectives and then build a comprehensive plan to accomplish those objectives.[3] In doing so, SWOT analysis performs an important function by highlighting the strengths and weaknesses and spotlighting the opportunities and weaknesses. Through this in-depth market analysis, companies can set their goals in the right direction.

Do you have to conduct a SWOTT Analysis to have an effective strategic plan? Why or why not.

Yes, it is necessary to perform a SWOT analysis for building an effective strategic plan. The reason is that it tells a company what has been done well, so as to focus in that area to earn higher profits. Then it highlights the internal harmful factors that can be improved by a company. Not only this, it gives insights for better opportunities in the market. [4] SWOT Analysis also informs about potential threats for a business. It is an immense planning tool that will help in building a winning strategic plan for a company.

What are the key planning factors for competitive success?

Key planning factors for an organization will differ from company to company. However, we can perform a general industry analysis, along with competitor analysis and macro environment analysis. These factors drive the strategy of a company, so it is important to understand then properly. For achieving competitive success, type of business must be taken into account. Some suggested key planning factors for competitive success are:

  • Focus on strategic planning
  • Right implementation of the strategy
  • Time management of the entire project
  • Using project management techniques for effective planning
  • Research and development
  • Acquiring land and maintaining liquidity
  • Well-constructed product
  • Establishing efficient channels of distribution
  • Providing after-sales support
  • Communicating every decision to everyone in the organization
  • Involvement of every employee in decision marking[5]
  • Teamwork and Collaboration between all departments
  • Following principles of Ethics.

Provide an example of an organization that has achieved competitive success through planning.

An example of an organization that has achieved competitive success through planning is “Nestlé”. It is a leading nutrition and health company. They have diversified into new areas by creating value for their products.  They were able to achieve that through long term planning by creating value for their shareholders, employees, consumers, and business partners. They strategically planned for the development of their research centers across the globe which is now one of their competitive advantages. Their entry into different countries and creating products with respect to the tastes and culture of that country was also a part of their strategic planning process. This planning is helping them to achieve their long term vision, i.e. creating shared value for society and shareholders.[6]

Provide an example of an organization that has failed to achieve competitive success as the result of failed planning.

An example of an organization that has failed to achieve competitive success as the result of failed planning is Hershey’s. It is a leading manufacturer of chocolates, confectionaries and beverages in United States of America. Hershey’s was in process of implanting an ERP Solution and they decided to choose SAP ERP. But this implementation failed and caused heavy loss to the company in terms of profits and sales. The reason was not any technical mistake by the vendor but poor planning by Hersey’s. They choose wrong time for implementation when business was at its peak. They made a blunder of restructuring the business process and changing it in a wrong way without doing strategic planning.

They spend most of the time on ERP implementation which interrupted the day to day operations of the business, creating confusions for the employees. They might have avoided this issue if they remained focused and planned out all activities properly before implementation. They should have set their priorities in a strategic manner by looking at the business prospects from all angles.[7]


  1. What is SWOT Analysis(2010), Retrieved from http://www.wisegeek.com/what-is-swot-analysis.htm
  2. Strategic Management(2010), Retrieved from http://www.quickmba.com/strategy/swot/
  3. Strategic Planning(2010), Retrieved from http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1079687246&type=RESOURCES
  4. Roger Lever (Dec 10, 2008), Retrieved from http://strategic-business planning.suite101.com/article.cfm/use_swot_analysis_for_strategic_planning
  5. Key Success Factors in Strategic Planning By Bill Birnbaum, CMC(2009) Retrieved from http://www.birnbaumassociates.com/key-success-factors.htm
  6. Retrieved from http://www.nestle.com/AllAbout/AllAboutNestle.htm
  7. Analyzing ERP failures in Hershey, Retrieved from http://www.erpwire.com/erp-articles/failure-story-in-erp-process.htm

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What is a SWOT analysis?. (2016, Aug 04). Retrieved from https://phdessay.com/what-is-a-swot-analysis/

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