Benefits of SWOT analysis
The main benefit of performing a SWOT analysis is that it incurs little or no cost. Anyone who has basic business knowledge can perform the analysis. You can even use it when you do not have excess time to address a complicated situation.
Therefore, you can improve your business without the expense of hiring a business adviser or external consultant. As repeatedly mentioned in this article, SWOT analysis concentrates on the most important factors affecting business.
You can do the following by using a SWOT:
• Understand your company better
• identify weaknesses
• avoid threats
• capitalize on the opportunities
• take full advantage of your strengths
• develop attainable business goals and strategies
Limitations of SWOT analysis
Always remember that SWOT is only a stage of the business planning process. It has certain limitations. You will have to carry out more in-depth analysis to take decisions for more complex topics.
You must understand that SWOT analysis only covers topics that can be considered as strength, weakness, opportunity or threat. So, it is not possible to address two-sided or uncertain factors. Two-sided factors are those which can be seen as both strength and weakness do not have a place in SWOT.
Some limitations of SWOT analysis are:
• SWOT does not prioritize the factors
• It does not offer solutions or alternative decisions
• It can sometimes create too many ideas. As it offers not help to choose which one is best, problem might arise.
• It can produce a lot of information which might not always be useful.
In spite of the limitations, SWOT analysis provides strategic insight into recommendations and opportunities. Especially small businesses benefit as SWOT helps map out a strategic plan. It is an actionable management tool.