The success of strategic decision-making critically depends on the analysis of the current situation, meaning that tools such as SWOT acquire the top priority.
One of the central advantages of this analysis method is that it helps a business to determine its strong areas and employ them to attain success (Bryson, 2018). At the same time, it shows what should be changed in the organization because this aspect deteriorates outcomes and decreases the speed of the unit’s growth (Rothaermel, 2021). A SWOT analysis also provides an opportunity to determine forces that can affect the strategy and choose a course of action. For this reason, by employing this tool, organizations acquire a chance to enhance their decision-making as they possess a better awareness of the current situation, information on how it might change, and what drawbacks should be eliminated to attain the desired outcome (Dess, McNamara and Eisner, 2020; Rothaermel, 2021). For instance, in real-life situations, huge corporations perform SWOT to understand their current vulnerabilities and advantages to plan further expansion and ensure the success of a new venture.
Another advantage of SWOT is its ability to focus on all aspects of a specific organization instead of working with only one dimension (Prasad, Khanduja, and Sharma, 2018). It contributes to better decision-making and strategic planning, as relevant knowledge combined with the correct understanding of opportunities and threats might help to elaborate an effective measure to avoid being overcome by rivals and respond to all possible threats existing in other markets (Deshpande, 2019). Specialists might also benefit from using SWOT to find the root cause for a current problem and accept a decision to promote positive change (Khatri and Metri, 2016). The tool’s simplicity, combined with its high applicability and flexibility, promotes its wide use in different situations.
Reference List
Bryson, J. (2018). Strategic planning for public and nonprofit organizations. 5th edn. New York, NY: Wiley.
Deshpande, S. (2019) ‘Social marketing’s strengths, weaknesses, opportunities, and threats (SWOT): a commentary’, Social Marketing Quarterly, 25(4), pp. 231–242.
Dess, G., McNamara, G., and Eisner, A. (2020). Strategic management: text and cases. 10th edn. New York, NY: McGraw-Hill Education.
Khatri, J. K. and Metri, B. (2016) ‘SWOT-AHP approach for sustainable manufacturing strategy selection: a case of Indian SME’, Global Business Review, 17(5), pp. 1211–1226.
Prasad, S., Khanduja, D. and Sharma, S. K. (2018) ‘Integration of SWOT analysis with hybrid modified TOPSIS for the lean strategy evaluation’, Proceedings of the Institution of Mechanical Engineers, Part B: Journal of Engineering Manufacture, 232(7), pp. 1295–1309.
Rothaermel, F. (2021). Strategic management: concepts. 5th edn. New York, NY: McGraw Hill.