Limitations & Advantages of SWOT Analysis On Businesses

SWOT analysis is the most used framework to analyze the performance of a business and to create a strategic marketing plan. Its primary motive is to give the company enough details on its resources and capabilities (according to the market in which it operates) to create a perfect business plan. The Groupon SWOT analysis elaborates this in much more detail. Reading it can give you the knowledge on how to conduct it and the questions that become part of the analysis.

Advantages of SWOT

SWOT, which is a model made of strengths, weaknesses, opportunities, and threats, helps as a source of information. It assists in recognizing the strengths of a company and understanding its weak points. The analysis provides information on the approaching threats so the business can create counter strategies accordingly. It is considered the major element of strategic planning, as all the information attained through this tool is related to business operations.

Another interesting fact is you get to relate your current business position with the past. This informs you how much you have progressed and what needs improving. If a company analyzes the core competencies of a firm, builds a foundation based on it, and prepares for the future, there is no way it cannot succeed.

Limitations of SWOT analysis

Every marketing tool has some drawbacks; therefore, people in business use multiple frameworks to analyze a situation. The information gained from SWOT analysis has to be accurate because any misleading detail can lead a marketing strategy to the middle of nowhere. SWOT analysis, no doubt, is the best in analyzing the four aspects, but sometimes those details are not enough. Therefore, another model like PESTEL should be used to increase its effectiveness.

SWOT analysis cannot provide you information on the availability of raw materials, government legislation, economic situation, etc. It is the reason why; we prefer using PESTEL to turn poor industry relations strong.