Monday, March 29, 2010

SWOT ANALYSIS

A strategic plan or mission for the future begins with an assessment of the current situation in which the organization exists. A systematic, thorough analysis requires attention to four things: strengths and weakness of the organization's resources(Internal environment) and opportunities and threats of the external environment. Such an analysis is known as SWOT ANALYSIS. SWOT is an acronym for Strength, Weakness, Opportunities, and Threats, which are described below:

1. Strengths

Organizational strengths are usually derived from its financial, human, and other resources that enable an organization to conceive and implement its strategies. Different strategies require different organizational strengths. A distinctive competence is a strength possessed by only a small number of competing organizations. Organizations that exploit their distinctive competencies often obtain a competitive advantage and attain above-normal economic performance.

2. Weaknesses

Organizational weaknesses are skills and capabilities that do not enable an organization to choose and implement strategies that support its mission. In practice organizations have a difficult time focusing on weakness in part because organization members are often reluctant to admit that they may not posses all the skill and capabilities needed. Organizations that fail to recognize or overcome their weakness are likely to suffer competitive disadvantages.

3. Opportunities

The organization's external environment presents both threats and opportunities. Organizational opportunities are ares that may generate higher performance. It has the potential to increase the organization's strength.

4. Threats

Organizational threats are ares that make it difficult for an organization to perform at a higher level. It has the potential to hurt or even destroy an organization.

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