SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats. The concept was first presented by Edmund P. Learned and his associates in their book “Business policy, text, and cases” in the year 1969. R. W. Griffin said, “SWOT analysis is a careful evaluation of an organization’s internal strengths and weaknesses as well as its environmental opportunities and threats”.
Finally, we can say that SWOT is a conceptual framework for systematic analysis that facilitates matching the external threats and opportunities with the internal weaknesses and strengths of the organization.
There are basically two factors of SWOT. These are: (1) Internal factors (strengths & weaknesses); and (2) External factors (opportunities & threats). The four elements of SWOT are discussed below:
Strengths: Strength is something a company is good at doing or a characteristic that gives the company enhanced competitiveness. The examples of strengths are as follows:
- skills and efficiency of management;
- cheap labor force;
- cheap raw-materials;
- technical knowledge of the owner and his employees.
Weaknesses: Weaknesses may be termed as the adverse condition of strengths. The adverse factors that are normally faced by the companies in conducting their functions are called weakness. The examples of weaknesses are as follows:
- lack of managerial and marketing related knowledge;
- lack of skilled and experienced employees;
- technological drawback;
- lack of innovative power;
Opportunities: Opportunities are the external elements of the environment that help in achieving organizational goals and conducting organizations functions properly. The examples of opportunities are as follows:
- available loan facilities;
- an absence of competition;
- favorable environment;
- cheap and skilled manpower.
Threats: The factors that create an obstacle in achieving organizational goals and objectives, are called threats. It hinders the growth of the organization. The examples of threats are as follows:
- Extreme competition;
- Natural calamity;
- Political unrest;
- Slower market growth.
So, these are the various elements or swot.