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Advantages and Disadvantages of SWOT Analysis

SWOT analysis can be a powerful tool used by business owners to understand the strengths and weaknesses of their company. In simple terms, a SWOT analysis can be said to be a tool used to measure the impact that a country, state, or organization has on the rest of the world. If you look at it in this way, it would make more sense that if a country is weak economically, it will have a negative impact on the rest of the world. Likewise, if the country is strong, then it will have a positive effect on the economy. Therefore, SWOT analysis can be used to determine whether the strength of a country’s economy is positive or not. Now that you know how it works, it will be easier for you to see its advantages and disadvantages.

Advantages

Four aspects: analysis has three aspects; namely, Strategy, Tactics, and Policy. These three aspects are used to evaluate a nation or a company’s strengths, weaknesses, opportunities, and threats. You may use SWOT analysis to take advantage of what you have, for your own company’s advantage. The strategic aspects are quite self-explanatory. The main idea behind strategic thinking in the context of swot analysis is that there are various possible ways for a nation or a company to approach a given situation.

  • Strategy: First, you have your strategy. This part of swot analysis focuses on the strengths and weaknesses of a country or a company. The strengths and weaknesses are usually derived from the four main aspects mentioned above. Your strategy should target your goals specifically, with the possible outcomes of each goal carefully outlined. When everything is put into consideration, it should be easy for you to identify which factors affect the success or failure of your goals, as well as your plans for dealing with the various threats or obstacles that you might come across in the process.
  • Tactics: Second, your tactics are the next aspect that you must pay attention to. Your tactics should take into consideration your goals, as well as the possible outcomes of each goal. It will then be up to you to decide how you will go about eliminating these threats or obstacles, by utilizing your strengths and the other parts of your swot analysis. If you know your strengths as well as your weakness, this will make it easier for you to build your strength against your possible threats that you might face.
  • Policy: Last, your policy is the last part of swot analysis, which is an extension of your tactics and strategies. In this aspect, you are basically telling the rest of the world (the competition) what your goals are, as well as telling them exactly how you plan to achieve those goals. This part of the swot analysis will tell the competition everything they need to know, which will help you secure your place at the top of the ladder.

Once you have gone through all four of these sections, you will have successfully completed your swot analysis. As mentioned, it is important to look at your strengths, as well as your weaknesses. You must also look at your possible threats and determine how you plan to handle them. Lastly, you must formulate a strategy that utilizes your strengths and weaknesses, along with all the other elements that make up your entire strategy. By completing this swot analysis, you will then have fully explored and understood yourself and your opponent, allowing you to form a sound strategy for your game.

Disadvantages

Strategies: First of all, it is important to recognize that the strength of each strategy varies. You should not expect to use one strategy across all circumstances. Your interests and goals will dictate which strategies work best for your company. Likewise, there will likely be situations where none of the strategies will prove effective.

Poor decisions: Another disadvantage of this strategy is that it can leave you confused and frustrated. You may have a hard time making informed strategic decisions, especially if you are required to look at both positive and negative aspects of the information. Sometimes you will find yourself trying to decide whether a strategy is beneficial at all. This can lead to poor decisions and possible losses.

Lack of direction and goal: Perhaps the biggest disadvantage of SWOT analysis is that it tends to focus on the strengths rather than the weaknesses. In doing so, it does not offer any solutions for dealing with problems that involve less obvious areas. It can therefore leave you with a lack of clear direction and goals.

In addition, some experts feel that it is best to combine analytical methodologies. This way, you get the best of both worlds. Ideally, the results that you come up with should form the basis of a comprehensive strategic planning approach. You should then make sure that these plans are continuously reviewed in order to ensure that the goals and objectives are still being met.

A false sense of security: Experts also point out some of the drawbacks associated with the strategic thinking process. First of all, the results generated by these methods do not show immediate and tangible benefits. Instead, these strategies tend to take a longer period of time before they produce tangible results. SWOT analysis has its disadvantages, since it may provide a false sense of security.

Another drawback of SWOT is that it tends to downplay the role of emotions in decision making. The analysis shows how a set of strategies can affect the outcome of a particular conflict, but it does not delve deeper into identifying the factors that can cause a particular person to take a certain action. In many cases, it is only when the facts come in after the fact that people learn that their initial actions were wrong. In other words, strategic thinking tends to rely too much on emotions and does not give importance to objective and rational considerations.

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