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Why SWOT analysis is very important in our lives

All industrial organizations do SWOT Analysis as part of their Strategic Management Process. What does SWOT refers to? The four variables mentioned in SWOT are extrapolated vis-a-vis competitors, new products/markets/technologies, changing customer tastes/demands, Government policy, product life cycles, and the like. Check out this article to know the details.


SWOT Analysis is very important to any organization, be that in IT, in Manufacturing or services. Generally the SWOT Analysis is done for evaluation of the organization's Strengths, Weaknesses, Opportunities and Threats.

In this article, an attempt is made to briefly discuss how the SWOT happens in industrial organizations and then discuss how and why it should work for individuals.

How it works

SWOT is always done in a very comprehensive manner. When a business organization identifies its core competencies, that is, areas where it is very strong, no matter how profitable a particular line of business is, or will be in the near to medium or even long term, the firm comes out of the business. For example, Larsen and Toubro wanted to get out of cement, since it is very strong in Engineering. That was a profitable business. Yet, it wanted to get out because it wanted a huge amount of time to be spent by its professionals, only in the core business. When it sold its cement business to the Aditya Birla Group, its then Chairman, Mr A.M. Naik, justified it, in spite of all criticism. He was later vindicated. L&T has grown by leaps and bounds and is so strong in project management skills, in construction of roads, for instance.

So, it evaluated its Strengths, identified the cement business as a weakness, saw other emerging opportunities in its core areas, and saw multinational companies entering the cement business. That was a real threat. Why should we concentrate all our energy here? Why can't we strengthen our own base, which is already strong, in so many areas? For instance, the Coimbatore by pass road leading to Palghat, was done by L&T under the build, Operate, Lease and Transfer model. Its construction is world-class.

Every single company, like say Cavinkare, which is so small when compared to Unilever, has its own Strengths. Its brands and their power. Advertising skills. Cutting down overheads when compared to Unilever. At two thousand crores, the company is raring to go. It never goes out of the Fast Moving Consumer Goods (FMCG) focus. This is exactly how SWOT works in the industrial world.

Doing it comprehensively, at our own level

Let us take an example of Suresh, a Mechanical engineer, working in a good, reputed, profit making and dividend paying, auto ancillary company. This person is so good in his work, and is in-charge Deputy Manager in a functional area called Melting in the Foundry. His colleague is Mr Prakash. Suresh is highly focused on his job, but is lazy (his weakness) in taking up higher studies or in learning new skills. Mr Prakash goes on to the M.Tech part time course from the local University, and also enrolls for his week-end MBA, after completing one year of M.Tech. He also learns Japanese language through an online forum.

Obviosly, Prakash has done his SWOT better than Suresh. Mr Prakash, was subsequently transferred to marketing, and also supply chain management, as the Management found that he had a taste for General Management Capabilities. Hence, by concentrating on one's strength of focus on taking on new challenges of Higher education, Prakash has exploited the opportunities from within the organization, for better skills development. Work hard, we must. For, we do not know when the opportunity may arise.

The rat race is equal to all, but only those who put in additional work will succeed. Additional work means acquiring new qualifications/skills. Hard work is absolutely essential. SWOT can help us only we are keen on eliminating weaknesses. Suresh did not eliminate his weakness of being lazy.

No wonder, Prakash was promoted as Manager, within 30 months. This is what happens. Prakash did have a short-temper as his main weakness, but has now changed, when the boss pointed out this mistake.

Identifying strengths and eliminating weaknesses : No Rocket Science

Identifying one's strengths is always easy. Strength is something that naturally comes to us. For instance, you may be good in presentation skills. You need to identify this and work with the boss, on this important skill. Your next strength may be that you are a good listener. And a good organizer too. Your decision making may also be okay. So, these are areas where you can optimize. It can happen in an organizational context or even in a personal context. For instance, we may have a strength of never showing our official frustrations or tensions at home. We need to always maintain and optimize this strength. We could also discuss with close well wishers, and they can identify strengths easily.

Similarly, identifying and eliminating weaknesses like anger, not being organized, not developing subordinates, or being so forgetful about urgent priorities at home can all be corrected with just a little more attention to detail.

Planning for opportunities to minimize and cope with threats

This is also quite simple. Look around, like Prakash did, for all Opportunities. Entrepreneurs do it so well. For instance, those guys who were dealing with STD and PCO calls, have now graduated to selling cell phones, spares and in servicing of cell phones. Change is inevitable, and will continue to affect us. The great Steve Jobs, Founder of Apple Computers says, "Look around, and don't settle". Which means that complacency does not have any value in our lives. If we don't move with the times, we will be left behind.

Threats at various levels are always there. Inflation is a huge threat. Complexities of city travel, controlling anger of family members, real world problems like water problems will always be threats. IT professionals need to enroll for additional skills in robotics, artificial intelligence, cloud computing and such other emerging technologies. These are real opportunities, but if not taken, will become threats. This is exactly why we should always be on the move.

Stay Hungry, Stay Foolish

This is the superb lesson from Steve Jobs. If we are always hungry, we will always innovate, look for new opportunities. Look to optimize our Strengths and eliminate all our weaknesses. The SWOT analysis, will teach us how to stay foolish. This simply means that we need to always learn. Nothing is final. Knowledge and application thereof will be so complicated in the years to come. Imagine a world, when the personal computers and laptops will be history. When everything is in the cloud. So, we all need to learn cloud computing, as if it were a skill like typewriting.


SWOT Analysis is the best way to win in the rat race, today, and for all times to come.


Author: DR.N.V. Srinivasa Rao13 Jun 2018 Member Level: Platinum   Points : 4

SWOT analysis is very important for any organisation especially when they want to go for expansion to take a correct decision regarding the direction of expansion. A company which is having a core competency in manufacturing should always see what are the weaknesses they have in their core competency area and they could see how to overcome the same. A company can do it in a systematic way. An individual also can get the analysis done for self and see where he is lagging behind in the progress and he should see that weakness is converted as his strong point. Before deciding to go on a new course we should see what are our strong points to learn that course, what are the weaknesses we have, how to overcome that, what are the opportunities we will get by doing that course and whether there is any threat if we go in that line.

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