The SWOT model is a very simple analytical technique, which allows a company to “quickly identify both its internal factors linked to internal functioning and external factors that depend on the environment in which it is evolving” (Speth & Probert, 2015, p. 5).
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While internal factors (Strengths and Weaknesses) are the elements that managers can influence and modify, the external ones (Opportunities and Threats) are beyond their grasp. This largely defines the significance of the SWOT model because it helps organizations to find ways to influence the manageable elements of organizational performance so that they adapt to unmanageable external situations. In this way, it is possible to increase benefits and decrease possible risks found in political, economic, legal, technological, and other external environments.
Current data collected within the SWOT model also assists managers in the identification of strategic priorities and orientations based on the occurring changes in the external environment and consistently with organizational vision, mission, and objectives (Gürel & Tat, 2017). It allows sizing up the company’s competencies and deficiencies and helps understand which of them can help avoid current risks and maximize present-day opportunities better or vice versa. Thus, the SWOT analysis can certainly be regarded as one of the most efficient decision-making tools.
Gürel, E., & Tat, M. (2017). SWOT analysis: A theoretical review. Journal of International Social Research, 10(51), 994-1006.
Speth, C., & Probert, C. (2015). The SWOT analysis : A key tool for developing your business strategy. Namur, Belgium: 50Minutes.com.