Purpose of SWOT Analysis

The major purpose of SWOT analysis is to enable the management to create a firm- specific business model that will best align, fit, or match an organizational resources and capabilities to the demands of the environment in which it operates.

Strategic managers compare and contrast the various alternative possible strategies against each other with respect to their ability to achieve major goals and superior profitability.

Purpose of SWOT analysis is to use information in formulating and evaluating the strategies at following four levels

Corporate-level strategy-Corporate-level strategy which answers the primary questions. What business or businesses should we be in to maximize the long-run profitability of the organization, and how should we enter and increase our presence in these businesses to gain a competitive advantage?

Business-level strategy- which encompasses the business’s overall competitive theme, the way it positions itself in the marketplace to gain a competitive advantage, and the different positioning strategies that can be used in different industry settings, for example, cost leadership, differentiation, focusing on a particular niche or segment of the industry, or some combination of these.

Functional-level strategy- directed at improving the effectiveness of operations within a Company, such as production, finance, marketing, materials management, product development, and customer service.

Global strategy- addressing how to expand operations outside the home country to grow and prosper in a world where competitive advantages determined at a global level.