Advantages & Disadvantages of SWOT

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SWOT analysis is a type of business analysis that people use to identify strengths (S), weaknesses (W), opportunities (O) and threats (T) in a project or business idea before executing it. There are both advantages and disadvantages associated with this type of analysis.

Before using SWOT to judge a business project or proposition, consider both the pros and cons of such a process and what they may mean for you.

Advantage: No Cost

One of the largest advantages of the SWOT analysis is that it has no costs associated with it. This is an analysis that anyone in the business can reasonably complete, and therefore, no specialists or business consultants are needed. Because you do not have to bring in any extra help, the SWOT analysis is a cost-effective method of analysing projects and proposals within a business.

Advantage: Valuable Results

The premise behind the SWOT analysis is to identify strengths, weaknesses, opportunities and threats in the concept being analysed. The ideal outcome, which can be quite valuable for a business, is to maximise the strengths while minimising the weaknesses so that the company can take advantage of the listed external opportunities while overcoming the identified threats. In that sense, there is great value in the results that the SWOT analysis can produce for a business.

Advantage: New Ideas

Another advantage of SWOT analysis is that it can help create new ideas for the business. When scrutinising the topics listed in the columns and rows of a SWOT analysis, a company not only increases its awareness of potential advantages (or disadvantages) and threats, but can also respond more effectively in the future by forming plans to counteract them as they happen.

Disadvantage: Not Critically Presented

Because the typical SWOT analysis is simple in premise, it is not typically presented for critical consideration. If the company is focusing only on the compilation of lists, it may not be sufficiently focusing on ways to achieve its objectives. There are other disadvantages to the list approach as well, in that items may not be adequately prioritised by the company. A long list of weaknesses, for example, may seem to have been cancelled out by an even longer lists of strengths, even if the weaknesses are significant and must be addressed.