S.W.O.T analysis is a planning tool that is used in organizations and individuals when identifying opportunities for growth in an organization and minimization of possible threats. It aids an organization to be able to plan and achieve both short-term and long-term goals. This enables the business to plan for its future direction to maximize opportunities to make a profit. S.W.O.T analysis is used by planning strategies that will support business in placing it in the front line above its competitors. S.W.O.T analysis is done by dividing a matrix into four parts, each box is labeled, and a conclusion is drawn. S.W.O.T is used in an organization to measure its strengths and weaknesses. It is also applied in predicting threats and optimizing the opportunities a business has to grow and to predict the future of the business (Ahmadi, Dileepan & Wheatley, 2016). The analysis helps an organization to identify its success component that will take the business to the next level.
The first category of the strategic guidance process involves analysis of the situation, where it provides the basis in the creation of the organization’s purpose. They also include analysis and evaluating an organization’s environment. Therefore, situation analysis is conducted through observation of internal employees and their interactions with each other. On the other hand, surveys and one-on-one discussions are also conducted to understand more about the elements within the organization. Surveys also aid in the understanding of the relationship that an organization has with its customers, suppliers, and other competitors.
The second category of strategic guidance is the formulation of the plan. Strategy formulation is coming up with strategies that help in designing the company business approach. Strategy formulation is further divided into three levels. The first level is administrative, where it includes the day-to-day organization’s departments. The organizational level consists of the day-to-day running of office activities. Human resource is in charge of hiring, promotion, and firing staff.
The second level in designing strategy is competitive under strategy formulation. This is the level where the organization has to know who their competitors are. The third level of strategy formulation is corporate. This level involves long-term goals of the organization, which include plans about the future, as well as whether the organization might need to merge with other organizations or exist on its own.
The third element of the strategy management process is strategy implementation. It comprises putting into action the strategy that has been formulated. The element focuses more on solving the harder problems first and focusing on the easier to be solved problems later. The fourth element of strategic management is assessing each level of the strategy. This involves the bearing the strategy has within the organization and its direct impact on employees.
Corporate governance is a practice where a company is ruled by either a board of directors or shareholders. It ensures that there is visibility in what is happening within the organization; hence, there is an openness among the shareholders and board of directors. It also improves the organization’s performance (Akbar, 2015). Besides, it guarantees that the internal company rules and policies adhere to the latter.
S.W.O.T analysis is essential in the process of determining organizations’ current position to aid in designing future strategies. Corporate governance is a sound system for an organization to implement since it helps in achieving long term goals. It also ensures company growth is met, and investors have confidence in the organization where they put in their money. Moreover, it is important in the continuous performance improvement and individual accountability in case of mismanagement of resources.
References
Ahmadi, M., Dileepan, P., & Wheatley, K. K. (2016). SWOT analysis of big data. Journal of Education for Business, 91(5), 289-294.
Akbar, A. (2015). The role of corporate governance mechanism in optimizing firm performance: A conceptual model for the corporate sector of Pakistan. Journal of Asian Business Strategy, 5(6), 109-115.