SWOT analysis was developed during 1960s for large organizations to determine the strategic fit between an organization's internal, distinctive capabilities and external possibilities and to prioritize actions. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The first stage of planning in an organization includes SWOT analysis and it helps them to focus on the main issues. In SWOT analysis, the internal factors of organization are Strength and Weakness whereas external factors are Opportunities and Threats which are also called as situational factor. This analysis portrays the current situation where we stand and where we would be in the near future.

Detecting this set of four factors are very significant for any organization as strength serves as foundation for growth, weakness can act as obstacle in the path of progress. By understanding these factors a firm can reinforce its strengths, overcome its weakness, can capitalize all the prevailing opportunities and can restrain the devastating threats.

Strength and Weakness of an organization may include Location of business, marketing expertise, quality of the products and services, reputation, etc. If an organization has hold over these factors then it is the strength of that company but if they lack in any of the sector then it is the weakness. Opportunity could be introduction to international market, competition with ineffective organizations, market segments offering improved profits, etc. Threats could be new effective competitor, price wars, other organizations with improved products and ideas, taxations, etc.

We have to be very realistic, concise and specific when we are applying SWOT analysis in our organization.

At Lucintel we apply our expertise and provide actionable insights to our clients in making confident business decisions based on the following three phase of our SWOT analysis process:

Phase 1: Detect strategic issues

• Identify external issues relevant to the firm's strategic position in the industry and the general environment at large with the understanding that opportunities and threats are factors that management cannot directly influence.

• Identify internal issues relevant to the firm's strategic position.

• Analyze and rank the external issues according to probability and impact.

• List the key strategic issues factors inside or outside the organization that significantly impact the long-term competitive position in the SWOT matrix.

Phase 2: Determine the strategy

• Identify firm's strategic fit given its internal capabilities and external environment.

• Formulate alternative strategies to address key issues.

• Place the alternative strategies in one of the four quadrants in the SWOT matrix. Strategies that combine:

1. Internal strengths with external opportunities are the most ideal mix, but require understanding how the internal strengths can support weaknesses in other areas;

2. Internal weaknesses with opportunities must be judged on investment effectiveness to determine if the gain is worth the effort to buy or develop the internal capability,

3. Internal strengths with external threats demand knowing the worth of adapting the organization to change the threat into opportunity;

4. Internal weaknesses with threats create an organization's worst-case scenario. Radical changes such as divestment are required.

• Develop additional strategies for any remaining "blind spots" in SWOT matrix. Select an appropriate strategy.

Phase 3: Implement and monitor strategy

• Develop action plan to implement strategy;

• Assign responsibilities and budgets;

• Monitor progress;

• Start review process from beginning.