Assessment by managers and - Strategic Management

The method which appears in almost every book on strategic management goes under a variety of names. It has been called SOFT (strength, fault, opportunity, threat), SWOT (strength, weakness, opportunity, threat), TWOS, TOWS, and WOTS UP (the final letters standing for underlying planning). The end product is a list,frequently presented on one sheet of paper, under the headings in the order suggested by the acronym. The S and W are the internal elements, and the O and T come from the external environment, including the competitors and the market. Such a list usually leads into either action plans or projects to put things right.

SWOT analysis (alternately SLOT analysis) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, andThreats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to albert humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from fortune 500 companies. Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization.

  1. Strengths: characteristics of the business, or project team that give it an advantage over others
  2. Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others
  3. Opportunities: external chances to improve performance (e.g. make greater profits) in the environment
  4. Threats: external elements in the environment that could cause trouble for the business or project

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated.

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Strategic Management Topics