SWOT analysis and its importance in setting of objectives and planning of strategies in an organisation.

 SWOT Analysis:

S stands for strength, W stands for weakness, O for opportunities, T stands for threats. It has been common to suggest that companies identify their strengths and weaknesses, as well as the opportunities and threats in the external environment.

The SWOT analysis are based on the analysis of the external environment (threat and opportunities) and the internal environment (weakness and strengths).

(i) The WT strategy aims to minimize both weakness or threats and may be called the minimum strategy. It may require that the company, for example, from a joint venture, retrench or even liquidate.

(ii) The WO strategy attempts to minimise the weakness and maximize the opportunities. Thus, a firm with certain weakness, in some areas may either develop those areas within the enterprise or acquire the needed competencies from the outside, making it possible to take advantages of opportunities in the external environment.

(iii) The ST strategy is based on the organisation's strength to deal with threats in the environment. The aim is to maximize the former while minimize the latter. Thus, a company may use its technological, financial, managerial, or marketing strengths to cope with the threats of a new product introduced by its competition.

(iv) The most desirable situation is one in which a company can use its strengths to take advantages to opportunities. Indeed, it is the aim of enterprise to move from other positions in the matrix to this one. If they have weakness, they will strive to overcome them, making them strong. If they face threats, they will cope with them so that they can focus on opportunities.