Strengths in the SWOT analysis refer to resources and capabilities of the organization that provides it with a relative advantage over its competitors in satisfying the targeted market. Weaknesses, on the other hand, refer to any limitation or deficiency in any of the resources or capabilities of the organization in comparison with its competitors that is likely to be a disadvantage in meeting the needs of its targeted market effectively. Opportunities represent significant favourable situations in the environment of the organization, while threats pertain to the significant unfavourable situations in the environment of the organization that are likely to represent major obstacles in the organization’ s present market position or desired position in the future (Pearce, Robinson & Mital, 2008).
The aim in a SWOT analysis in strategic managerial planning is “ identification of one of the four distinct patterns in the match between a firm’ s internal resources and external situation” (Pearce, Robinson & Mital, 2008, p. 174). The internal resources consist of its competencies and capabilities, present as strengths and weaknesses, over which an organization has a certain degree of control.
The organization has a much lower degree of control over its external environment, which offers opportunities for exploitation and threats to sustained development (Pearce, Robinson & Mital, 2008). The SWOT analysis assists an organization to identify one of the four possible positions the organization is in, in terms of its internal resources and external environment. In the first position, the SWOT analysis may show that the environment offers several opportunities and the internal resources are primed for vigorously exploiting these opportunities. Such a situation for the company gives strategic planning the option of employing growth-oriented strategies to seize the favourable situation shown by the SWOT analysis (Pearce, Robinson & Mital, 2008).
The second possible position that a SWOT analysis may throw up is that though the organization has several key strengths, the external environment is not favourable.
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