The Usefulness Of Swot Evaluation To Organisations Business Essay

Change is a very significant word in business. Modern business is thought as the best and effective. To make it through in the modern competitive business environment, the organizations have to look at their ways of meet the changing demands and needs of the clients. SWOT examination is one the most important business strategies which helps the organizations to assess their current situation both internally and externally and implement a new strategy where necessary.

Moreover, modern high technology, communication system and online shopping are highly influencing the customers and so their demands and needs are becoming volatile. They have more choices, choice products and services to get. Also, the changing life style of human beings is also another important reason why the business organizations need to change their strategies. To balance these changes, both technological and public, the professionals should plan a SWOT evaluation and implement a fresh business strategy.

However, change in business enables a business to compete with its rivals and win the business position. Business organizations, particularly fashion, clothing, perfumed, mobile companies, technological equipment consider change as the utmost essential part of business strategy. For manufacturing companies, change is important in the sense that it gives variety to the existing customers and satisfies their unexposed needs.

However, to bring change running a business environment, the vital thing is to identify the necessity of change, which will be followed by a specific arrange for these changes. Various business tools, process, technology and performance meters are used to incorporate these changes.

There is no alternative for constant improvement in business environment. To survive in a competitive business environment, continuous improvement is required to meet the business aims.

So, SWOT examination is vital for business organizations to execute a fresh business strategy in order to cope with the modern competitive business market and meet business goals.

Modern Business Environment: Volatile

Change is one of many and vital elements in business market. There are lots of reasons whey business market is changing and getting influenced by it. The term 'change' has now end up being the part of commercial business. Change management is today's business philosophy which is implemented almost by every renowned business company to meet up with the troubles of volatile business environment. The reason why of quick change in business can be monetary instability, inflation, changing life style, intensive use of modern technology, etc. Rapid surge and death of new companies also have an effect on business environment.

What is SWOT Analysis?

An internationally identified and intensive used business tool, SWOT examination is a powerful technique to assess the current situation of a business organization and to predict the future business life. It's the main level for marketers to plan and concentrate on key issues. However, SWOT can be an abbreviated term for Advantages, Weaknesses, Opportunities and Risks. Strengths and weaknesses are interior factors, while opportunities and risks are exterior.

History of SWOT evaluation:

Albert Humphrey developed the SWOT evaluation strategy. Team Action Model was the research project that Humphrey led a Stanford College or university in the 1960s and 1970s from where the term was derived. He collected the info for this research from many top companies. However, SWOT examination is an prolonged form of TAM, which really helps to manage change running a business organization. Additionally, since 1960s organizations have been using SWOT analysis as a small business concept. It's been also used in management framework and commercial marketing. Indeed, with the passage of time the concepts of SWOT have been modified to match the needs of business setting.

Significance of SWOT evaluation:

SWOT examination is one of many business tools, which aspires to assess the current situation of an organization in order to develop business ways of encounter competition. It is a key element of strategic development. It helps an organization to anticipate its future potential clients and the financial environment. Again, it helps an organization to develop its critical and specific decisions to plan strategic objectives. It can help organizations to anticipate future difficulties or problems. Notably, SWOT analysis can even be used in human being life. It helps individuals to get an instantaneous view of personality or job. In fact, SWOT research is a magnificent tool for appraisal both running a business and individual life.

Apart from these, there are numbers of other reasons whey an organization uses SWOT analysis. It could be used as an instrument of problem fixing, decision making, planning, brainstorm meetings, workshop sessions, product evaluation and also personal development planning.

Discussion and Evaluation: SWOT

A tool for auditing a business and its own environment, SWOT examination is the principal stage of planning which helps marketers to concentrate on key issues of business strategies. However, SWOT stands for strengths, weaknesses, opportunities, and hazards. Strengths and weaknesses are internal factors. Opportunities and threats are exterior factors.



Strengths will be the first components of SWOT evaluation which assesses the positive tangible and intangible traits of a business internally. These characteristics are controllable and within the organizations. These strengths of the person or a business help to achieve the objectives. Strengths can even be thought as the elements which allow a business to prosper, evaluating to the competition. It focuses on the advantages of the organization over the business.

For example, the talents of an organization can be good quality of the merchandise, brand image, attention of electronic media, customer commitment, best location, strong communication, etc.


Weaknesses include the elements which are damaging and stand in the form of achieving the business objectives. These are the inner factors in a organization's control that prevent to get the desired targets. It can help the organizations to identify the specific areas where advancements are essential.

The weaknesses of an organization, for occasion, can be poor quality standards, destroyed reputation, past damage project, turned down by customers, old fashioned products, poor communication system, neglect of mass media, etc.



Opportunities will be the external factors over that your organization has control. But, these factors influence the company's success and business functions both straight and indirectly. These are the factors why an organization exists and grows. These factors help an organization to foresee the near future prospects and opportunities that the business may encounter. They help the organization to plan and identify the time line to achieve the goals. Indeed, opportunities will be the objectives of business in a wide sense.

For example, the opportunities of a business can be a new business market, stretching business overseas or even to other outlets, introducing a new product, adding new value (such as, online marketing), moving to global market, etc.


Threats will be the exterior factors which cause risks and risks for a business to achieve the goals and targets. As external factors, organizations do not have control over them, but are highly afflicted by them. These factors help an organization to have guard from risks and problems. These factors also guide the business to drive on the right road.

Threats of a business, for example, can be:

Rising reputation of the rivals in local or global market

Changing patterns of customers

Pricing competition with competitors

Arrival of new alternative product in the market

New taxation policy

Difference between exterior and interior factors of SWOT:

The difference between external factors and inside factors of SWOT evaluation is very noticeable. The essential difference between your two is the fact inner factors are controllable, while external factors cannot be controlled by the organization. Usually, the external factors (advantages and weaknesses) of an organization are mainly based on organization itself, corporate market or customer needs and needs. The effectiveness of an organization can be defined as the way of reaching customer needs and satisfaction, while weaknesses are the problems or shortcomings that the business faces to fulfill the market or customer requirements. However, the inner factors of a business usually affect the following factors, such as sales and profitability, product quality and brand image, product cost and customer needs, employee potentiality and the financial capacity of management, etc.

On the other hands, the external factors of a business are the conditions that impact not only business but the total business system. The normal issues that influence the company externally can be business sections, customer motivations and unmet needs, business strategies, overall business constructions, environmental issues (such as governmental, technological, economic, ethnic, demographic, etc. ), etc.

How to apply SWOT Research?

Though made an appearance as a straightforward and easy business tool, SWOT evaluation is very powerful and important technique. To implement SWOT analysis, the essential thing an organization will need is time and sufficient information and resources. It is not possible to use a SWOT research in an corporation by one person, since it requires team work and attempts. The positive qualities of this approach are that it is quick, adaptable and thorough managing tool, which will make the process easy to apply.

However, the process of SWOT examination comes after a sequential order. Certainly, there are four steps to follow in this evaluation. Whether analyzing a product or something, the SWOT analysis is done just as.

First Step: Collection of information

In this level, an organization collects all the information about the first two internal factors, advantages and weaknesses. However, this information collection can be carried out through a variety of ways. One-to-one interview or an organization discussion can be taken to assemble information. There will be quantity of different views, questions and issues that related to these elements.

Second Step: List possible Opportunities and Threats

Here, the business can make a list of all the opportunities that it could encounter in the foreseeable future. It could make another list of all the near future possible risks within the business.

Third Step: Planning action

In this stage, the plan of action will carried out to meet these opportunities and secure the company from the hazards. In this stage, the organization makes sure that they can keep up with the advantages, change or stop the weaknesses, prioritize opportunies and reduce threats.

Again, there are other ways to put into action SWOT analysis. The next chart shows another different approach of SWOT research.

SWOT Evaluation Framework

Environmental Scan



Internal Examination

External Analysis

/ \

/ \

Strengths Weaknesses

Opportunities Threats


SWOT Matrix

According to the SWOT matrix solution, there should be a balance between these elements. The solution follows the following chart:

SWOT / TOWS Matrix





S-O strategies

W-O strategies


S-T strategies

W-T strategies

S-O strategies: strengthening positive features or opportunities

W-O strategies: preventing or conquering weaknesses to meet opportunities.

S-T strategies: strengthening ways to get external threats

W-T strategies: having a solid intend to avoid weaknesses and threats

CASE Analysis: SWOT Examination OF TESCO

There are amounts of organizations which are employing SWOT analysis almost every day in this modern business environment. This research can be continued a small area of the group or on overall company. TESCO is one of the major global business installations which may be analyzed by applying SWOT analysis all together.

Strengths in Tesco

The first strength of Tesco can be found in their level of popularity and business achievements of 'World Retail Honor'. Again, the regular increase of overall sales is another significant durability of Tesco. Moreover, Tesco has another durability in their reserve cash for business enlargement and meeting economical crisis.

Weaknesses in Tesco

The primary weakness of Tesco are available in their bad arrears, house insurance boasts and credit-based card arrears. Being truly a price leader on the market, Tesco is getting rid of earnings. Again, Tesco business and its profitability is mainly based on the UK market.

Opportunities in Tesco

Being another most significant global trader, Tesco has strong buying electric power. Tesco is a worldwide business organization which has quantity of different products and services. It is still extending to the global market and gaiting global trust. Extensive use of modern technology is enabling Tesco to meet up with the modern concern of marketing. Constant increase of Tesco mobile customers can also be regarded as a business opportunity.

Threats in Tesco

Economic inflation is one of the major business dangers that Tesco acquired encounter recently. The rising cost of food and non-food recycleables is another menace for Tesco. Changing buying practices of customers also have an impact on Tesco's business strategies and thus it needs reassessment of the current market. Competition with rivals, especially with Wal-Mart which can takeover Tesco business position anytime is another noteworthy risk that Tesco is encountering nowadays.


To summarize, SWOT research is one of the powerful business tools which is often used in almost every business situation and also in specific affairs. It can help organizations to examine their current position and to plan their future plans. It is decision making tool that delivers the framework for a business to generate business strategy, tag its position and immediate its objectives. Though very simple, SWOT analysis requires close attention and experienced request.

In the present day changing business market, SWOT evaluation has been became an essential tool to the marketers. SWOT research is often said to be paralleled and alternative to the PESTEL examination. Often, organizations use both these business tools mutually to plan their strategies.

Once again, the SWOT analysis helps organizations to get an overall picture of the business and the starting place of tactical planning. It is the principal tool of business examination.

To conclude, experienced marketers whenever using SWOT analysis ensure that the company is dependant on its strengths and opportunities, able to stop and correct its weakness, and can protect itself from external dangers. They consider the business environment extremely unstable and thus use this tool that might help organizations to predict their future through this technique.

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