SWOT analysis - Explanation of the tool

Abstract

A SWOT analysis is a complete and precise tool used very often by businessmen, and among them marketers to effectively summarize an organization's strengths, weaknesses, opportunities and threats. The purpose of a SWOT analysis is primary to determine probabilities between an organization's internal capabilities (which are its strengths and weaknesses, often relative to competitors) and external forces and/or trends (which are outside opportunities, that help the business and threats, potential major risks if not anticipated and considered soon enough).

Thus, using a SWOT analysis enables an organization to determine the critical strengths on which to build marketing strategies that will outperform competitors in its chosen markets. In short, marketers can use a SWOT analysis to build marketing strategies that match what an organization does best in the markets that value its capabilities the most. Organizations that fail to conduct SWOT analysis, or conduct them ineffectively, are more likely to develop marketing strategies that perform poorly because they do not exploit the organization's competitive advantages.