CIPD SWOT Analysis

SWOT is a tool used to analyse the Strengths, Weaknesses, Opportunities, and Threats that affect the functioning of businesses. The Business after identifying the business objectives requires the management to identify the internal issues as well as the external issues that affect completion of those objectives within the business. SWOT is used in strategic planning to effectively understand the environment to which success of the business is determined. To effectively understand the SWOT analysis tool, learners should identify and have a good understanding of the SWOT analysis framework;

SWOT Analysis Framework

From the SWOT template, it is clear that the strengths and weaknesses are both internal factors from the business, which learners should evaluate when analysing the achievement of specific business objectives. The opportunities and threats are external factors from outside the organisation, which the learners should evaluate and look into to ensure that they understand the issues that might have an impact to the organisation. Nevertheless, the strengths and opportunities are helpful to the businesses, and they should be taken advantage of. The weaknesses and threats are likely to have a negative impact, and are risky. In order to effectively achieve business success, the management should work on them and brainstorm on the strategies they should implement to address them.

SWOT analysis helps the management to carry out an assessment on the various issues that affect the internal and external business environment, and this enhances effective decision making process from the management. The SWOT analysis factors are flexible and thus the analysis process should be conducted often to ensure that the assumptions made when making specific business decisions are frequently reconsidered to create business success.

Advantages of SWOT analysis

• SWOT is a simple framework with only four elements of consideration
• Provides an environment for the users of the framework to engage in critical thinking
• Helps the management within the business to identify the strengths within the business, and evaluates how well they can build on opportunism to create positive impacts on the business.
• The tool helps the management to identify the weaknesses in the business, and anticipate the threats that might affect future business operations. This creates opportunities for them to take action to manage the possible risks and minimise the risks impacts.

Disadvantages of SWOT analysis

• The data obtained from the analysis may be simplified, and this may result to having the management use data that is insufficient in making the right decisions
• The assumptions made from analysing the SWOT analysis may not reflect to the situation of the business environment.
• It may be challenging and difficult for the SWOT analysis process to be carried out especially when the business is a big complex organisation
• The management has to be very keen in making sure that the changes made after making the analysis are subjects from the business strengths, and this might be challenging to the analyst
• The SWOT factors change often, and the analyst has to regularly carry out the analysis process to come up with the right decision. This might be challenging to the management

SWOT is a tool analyzes the strengths, Weaknesses, Opportunities, and threats that affect the functioning of businesses.