A SWOT analysis serves as a framework for analyzing both the external and internal environments of a company or organization (Eisner, 2014). It is widely based on the notion that a business or company should build on its strengths, take advantage of opportunities that the business environment presents, remedy, or work-around weaknesses, and protect the business from threats. In most instances, a SWOT analysis involves a simultaneous consideration of the external and internal factors.
The elements of SWOT analysis include strengths, weaknesses, opportunities, and threats (Eisner, 2014). The strengths are the element of SWOT analysis that are concerned with core competencies of an organization as well as strategic factors that are likely to contribute to the success of a business or give it a significant competitive advantage over other business. Weaknesses encompass elements that make it less likely for a project or business to succeed. These are areas where the business is lacking or inadequate. Opportunities encompass factors that can potentially increase the productivity or performance of the business. Running a successful business involves identifying and taking advantages of business opportunities. Finally, threats are an element of SWOT analysis that is concerned with factors or things that can potentially harm a business.
The differences of SWOT analyses arise in the way businesses handle the various elements. For example, a SWOT analysis may overemphasize one aspect of the strategy while paying little attention to other elements. In some cases, the focus on internal and internal environment may also differ. For example, some SWOT analyses that focus on the external environment may be relatively narrow while others may focus more on internal factors. The applicability of SWOT analyses may also differ from one business to another. For example, the strengths identified through a SWOT analysis may not translate into a competitive advantage for a business (Eisner, 2014).
References
Eisner, B., Lumpkin, T., & McNamara, G. (2014). Strategic management: Creating competitive advantages. New York: McGraw-Hill Education Press.
