Advantages Of Swot Analysis

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In this essay I aim to outline and explain some of the management tools and assessment methods that can be used to analyse a company. I will further look into the advantages and disadvantages of these tools and identify which are best suited for a specific business or industry.

Due to its logical and practical nature it is a very common and effective tool used to analyse organisations by dividing it into four main categories: Strengths, Weaknesses, Opportunities, and Threats. This consolidates and simplifies the task of understanding what drives performance and or what is standing in its way.
The business tool ultimately aims at identifying weaknesses and threats and focuses on how these can be transformed into …show more content…

It gives valuable insight into a market where you can identify the size, growth and market share of your rivals, while observing trends and benchmarking objectives for the future. DISADVANTAGES:
Some obstacles pertaining to the SWOT analysis is that it can become outdated pretty quickly as consumer trends and data change. Also depending on how many participants conduct such an analysis one has to factor in their personal biases and perspectives that may lead to disagreements.
The PEST analysis is more of long-term analysis that can help determine how Political, Economical, Social, and Technological change will affect the performance and activities of a business.
Seeing that financial ratios depend on the financial data of companies which are influenced by their accounting practices and procedures, information can be distorted and render the comparison of ratios less useable. Also ratios indicate on overall result for a period (financial year) but do not explain how this was achieved in detail and what factors favorable or unfavorable contributed to its

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