Assignment on SWOT Analysis

SWOT Analysis

SWOT analysis is a strategic management tool that stands for Strengths, Weaknesses, Opportunities, and Threats. It is regularly used in a risk management process to identify and assess risk elements in advance and take actions to reduce the likelihood of these events occurring.

Consequently, its application minimizes the damage caused by these events and contains the cost of the happening that can disrupt normal organizational activities. Sometimes, applying SWOT analysis can be used to recognize and manage risk opportunities.

Four Elements of SWOT Analysis

The four elements of SWOT may be categorized into two dimensions, either internal (Strengths and Weakness) and external factors (Opportunities and Threats) or useful (Strengths and Opportunities) and harmful factors (Weakness and Threats).

Strengths and weaknesses are relative to internal factors, while opportunities and threats are external elements of an organization.

Organizations regularly combine two-by-two elements, i.e., Strengths and Opportunities, to review favorable and useful aspects and Weaknesses and Threats to reflect on harmful and detrimental elements.

Organizational Strengths

Organizational strengths broadly include economic resources, among other factors. Strength is characterized as a distinctive element of an organization, thereby deriving substantial expertise.

Robinson defined an organisation’s strengths to include’ a resource, skill, or any other advantage relative to competitors and the needs of the markets an organisation serves or expects to serve. It is a distinctive competence that gives the organization a comparative advantage in the marketplace.

From the risk management perspective, strengths are observed when an organization adequately follows a reasonable standard(s) to control and organize risk. Thus, with proper instruction, strengths can decrease the risks of errors.

Organizational Weakness

Organizational weaknesses may include a lack of or inadequate economic resources, among other factors. Weakness indicates how an organisation is weaker compared to its competitors and a reasonable standard.

For that reason, a weakness in risk management is an organization’s inability to fulfill a standard judiciously. Thus, organizational weakness is in sharp contrast to organizational strength since it characterizes negative and unfavorable results.