Swot Analysis Weaknesses

SWOT ANALYSIS
SWOT, standing for strengths, weaknesses, opportunities and threats, is an assessment technique which can be implemented to focus on possible internal and external factors which are affecting the organisation’s performance. Originating from the Stanford Research Institute, management consultant Albert Humphrey first proposed this concept in the 1960s. At the time, the economic climate lacked insight into long term planning in terms of execution of said plans. Initially Humphrey intended SWOT analysis to apply specifically to criteria such as administration, products, customers, etc. However, since the 1980s’, the use of SWOT analysis has extended far beyond business purposes only and is now a common analytical strategy for a vast

One main disadvantage is the simplicity of analysis in regards to categorising factors as positive or negative. The impact in which an element of the organisation has can often have both positive and negative aspects. The SWOT analysis, however, requires the organisation to deem the factor as only positive or negative, not allowing for a thorough categorisation of factors. For example, the biodegradability factor for Company XYZ’s product could be considered both a strength and a weakness, since eco-friendly products are often more costly to produce. SWOT analysis does not regard both the positive and negative aspects when considering how this attribute influences overall performance. In addition to only one-dimensional consideration of factors, the completion of SWOT analysis is also highly subjective, with many attributes originating from observations and bias of the data collectors rather than quantitative data. This can lead to disagreements of assessment of the company’s progress. The simplicity of the SWOT analysis also presents another disadvantage of a lack of mechanism to weight each contributing factor. Strengths, weaknesses, opportunities and threats present varying degrees of impact on company performance, however the SWOT analysis does not allow a means for these degrees to be evaluated. In relation to Company XYZ, there are external threats of both outsider competition and increasing government taxes on their products. However, the threat of taxes is more detrimental to the company’s net profit, however this severity is not weighted when conducting a SWOT analysis.
Overall, the SWOT analysis is a framework used in most small and big organisations, being simple to use and affective in performance analysis. The simplicity of SWOT allows for the framework to be used without prior experience, however