A SWOT analysis is a company’s evaluation of its internal strengths and weaknesses and the external opportunities and threats. It provides key information that helps managers match the company’s capabilities and resources to the competing environment. Many businesses – from major corporations to a single-person, home-based business – conduct a SWOT analysis to keep up with changes in the market place and competition. This very important tool is a must in forming the strategic plan, setting goals and creating objectives for the business. Without properly conducting a SWOT analysis, the company is doomed to failure.
However, organizations are not the only ones that should perform this task. It is also an essential key in your day-to-day decision making in your personal life. Before you decide to buy that car or new piece of technology, evaluate the impact of what can happen when you make that decision. You may find out that you will prevent yourself from making the wrong choice.
Let’s assume that you are looking to buy a sports utility vehicle. Here is how a SWOT analysis can help you with your decision. You have decided that you want to purchase a specific make and model because of positive feedback from other consumers. You are also looking for something that handles well on snow. These both would be considered major strengths. However, a weakness may be that the gas mileage is not as good as cars. Since you drive a long distance to work, you would have to take that into consideration.
The threats are from the external environment. The economy is not good and you do not know where whether you will be at your job within the next few years. You have to decide if you are able to afford the payments of a new vehicle. You do not want to get a loan and then, down the road, have your car reposed because you can not afford the payments.
You decide that it might be less expensive by looking into used SUVs. You find one that will fit into your budget, even if you lose your job. However, there are safety concerns since the SUV you are looking at has several recalls. You also find out that this SUV has a reputation for rollovers.
You may decide to look at the opportunities while you are car shopping. You find a car that handles very good on snow. With the increases in technology, this car is a hybrid, one that uses gas more effectively. You balance out what the monthly payment is and how much you are saving in gas expenses. You decide that this is the car for you because in the long run, you will be paying less money. Performing the SWOT analysis helped you make the wisest decision.