The SWOT analysis is a strategic planning tool for organizing internal strengths, weaknesses, and external opportunities and threats. Knowing this helps organizations to know how to distribute resources, compete well, and attain organizational objectives.An organization develops strengths, or positive internal factors to give it a higher ground over other enterprises in the same field. Some of these factors may comprise a good brand reputation, a market-oriented customer base, and highly skilled employees.Strength, weaknesses are the negative internal factors which may limit the organizational performance. They can involve high cost, old-fashioned technologies and unqualified personnel.Positive external factors, which have the potential of being beneficial to an organization, include opportunities. They may also be related to market changes, regulation policies change by the government, or newly introduced innovations.

• Negative external factors, such as threats, that can damage any organization. These can be additional competitors, changing taste of consumers, and/or poor economy. SWOT analyses can be used to:  

1. Develop strategic plans  
2. Improve decision-making in the area of resourcing.  
3. Identify potential problems and opportunities  
4. Gain a competitive advantage  
5. Improve overall performance  

Using techniques such as SWOT analyses is very important in improving performance in any performance oriented organisation pursuing its objectives.                                                                                                                                                                                                          

Here is an example of a SWOT analysis for a hypothetical company: 

Strengths Strong brand reputation Loyal customer base Skilled workforce Efficient production process Weaknesses High costs Outdated technology Incompetent manpower in some regions or places. 

Opportunities Growing demand for company's products Fresh government regulations meant to favour companies commodities. New technologies that would help in improving production process.

 Threats New competitors entering the market Changes in consumer tastes Economic downturn Such understanding of SWOT provides a basis for the decision making processes aimed at the proper resource allocation, competition within the market and achievement of organizational goals.