Swot Analysis Essay

1310 Words Dec 26th, 2013 6 Pages
PURPOSE OF A SWOT ANALYSIS 1

The Purpose of a SWOT Analysis
Charles Anderson Joyner III
Grantham University

PURPOSE OF A SWOT ANALYSIS 2

Abstract

Every business to include the largest ones that control their areas of industry--has a limited supply of manpower, production capacity and capital. Evaluating the company’s strengths, weaknesses, opportunities, and threats helps it determine how to allocate these resources in a manner that will result in the highest possible potential for revenue growth and profitability. The management team
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SWOT analysis is also an important step in the planning process but sometimes its value is often minimized in spite of how simple it is in creating it. The role of
SWOT analysis is to take the information from the environmental analysis and separate it into internal issues (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines if the information indicates something that will assist a business in meeting its objectives (a strength or opportunity), or if it identifies an obstacle that must be overcome or minimized to achieve desired results (weakness or threat). The purpose of a SWOT analysis is to get managers into the mindset and thinking about everything that could possibly be an impact to the success and failure of a new project. Failing to acknowledge an essential strength, weakness, opportunity or threat could and usually does lead to terrible management decisions. Take for example, a software company that might hold a patent for a new computer processor failed to recognize a threat from its competitors who were also developing comparable products, it might overestimate conceivable sales of its new processor and assume debt to finance the growth of its project only to notice down the line that the company’s promising product will not make enough money to make a profit or even pay off the assumed debt. A SWOT analysis could have helped this

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