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Text B

SWOT Analysis

SWOT analysis (alternately SLOT analysis) is a strategic planning method used to specify the objective of the business project, identify and evaluate factors that are favourable and unfavourable to achieve that objective. These factors involve:

Strengths: characteristics of the business, or project team that give it an advantage over others.

Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others.

Opportunities: chances to improve performance (e.g. make greater profits) in the environment.

Threats: external elements in the environment that could cause trouble for the business or project.

These four are classified as internal and external factors.

Internal factors are the strengths and weaknesseswhich are internal to the organization.

External factors are the opportunities and threats presented by the external environment to the organization.

The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. These factors may include all of the 4P's; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position.

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs.

First, the decision makers have to determine whether the objective is attainable. If the objective is NOT attainable a different objective must be selected and the process repeated.

One way of utilizing SWOT is matching and converting. Matching is used to find competitive advantages by matching the strengths to opportunities. Converting is to apply conversion strategies to convert weaknesses or threats into strengths or opportunities. An example of conversion strategy is to find new markets. If the threats or weaknesses cannot be converted a company should try to minimize or avoid them.

The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT analysis may be used in any decision-making situation when a desired objective has been defined. Examples include: non-profit organizations, governmental units, and individuals. SWOT analysis may be used in pre-crisis planning and preventive crisis management, it may also be used in creating a recommendation during a viability.

SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization. It is therefore advisable to combine a SWOT analysis with portfolio analyses such as the GE/McKinsey matrix or COPE analysis.

It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.

Notes: candidate SWOT entry - кандидатура на SWOT аналіз.

It is prudent not to eliminate too quickly any candidate SWOT entry. -

Розумною (/обережною/завбачливою,) тактикою було б не усувати будь-яку кандидатуру на SWOT аналіз передчасно

1. What is the SWOT analysis used for?

2. What factors does it involve?

3. How can we differentiate between external and internal factors?

4. Do the decision makers have to determine whether the objective is attainable? Why?

5. What weaknesses does SWOT analysis have?

6. What ways of utilizing SWOT do you know?

7. Where can SWOT analysis be used?

Have you (your family) ever used SWOT analysis? If so, did it help to achieve the aim?

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