1 What are the major elements of SWOT analysis? SWOT Analysis is a tool used for determining strength, weakness, opportunities & threats for an effective decision making. SWOT analysis guides an organization against the positives and negative within and outside the organizations i.e external environment. It helps in forecasting/predicting the changing trends & also helps them in decision making process of an organization. key purpose of this analysis is to identify the strategies that will help an organization to create a business model that will best align to its resources & capabilities considering the environment where it operates.

SWOT Analysis consists of four elements strength, weakness, opportunities & threats which can be classified into broad factors internal and external to an organization.
Strength & weakness are internal factors, are in control of an organization, opportunities & threats are external factors and refer to environment within which organization operates but are not in control of an organisation.

Internal factors

* STRENGTHS: These are the qualities that enable an organisation to accomplish its vision mission and objectives strengths can be either tangible or un tangible. Strengths refers to what an organisation has expertise in, traits and qualities employees of an organisation posses (individually or as a team) and the distinct features which gives an organization competitive advantage and consistency. Strengths are the beneficial aspects & capabilities of an organisation which includes human competencies, financial resources, product services, goodwill, brand loyalty. Example includes no debt, committed employees, product line.

* WEAKNESS: weakness refers to those factors which prevents an organization from accomplishing its mission, vision and objectives with full potential. Weaknesses deteriorate an organizations success and growth. Weaknesses could be insufficient R&D facilities, narrow product range, delayed production, non availability of raw material on time etc. However if analyzed carefully & on time an organization can minimize and eliminate these weaknesses. For eg if an organization needs to overcome obsolete machinery, a new machinery can be purchased for which funds will be required but if an organization has already taken steps by adding amount for machinery by using depreciation it will be easy to manage funds on time without burden.

External Factors

* OPPORTUNITIES: Refers to one of the external factors for an organization these are present in the environment where it operates. These refers to taking benefit of conditions in its environment to plan & execute strategies that helps the organization to attain its objectives. Organization should be careful & alert and utilize the opportunities when they arrive. Opportunities may arise from market, competition, industry, government & technology. For eg Liberty in FDI laws is an opportunity for an organization which is looking or planning for foreign investment.

* THREATS: These are external factors for an organization. Threats arise when some conditions in external environment of an organization change the reliability and profitability of organization. Threats are uncontrollable for an organization, when threat comes it can put the stability and profitability at stake. For eg Sudden change in technology can be threat for an organization which do not have enough funds to use the new technology in their organization. Also some change in laws eg levying more tax on export can be a threat for an organization involved in export.

Thus these are the four major elements involved in SWOT analysis. If these all are analyzed carefully it can prevent an organization to take wrong decisions.