Why should a SWOT analysis form part of the planning process when using the business risk approach?
Explain not only about SWOT analysis but also why it should be part of planning process when using business risk approach
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Strategic Planning (in nonprofit or for-profit organizations)
Written by Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Copyright 1997-2007.
Adapted from the Field Guide to Nonprofit Strategic Planning and Facilitation.
Simply put, strategic planning determines where an organization is going over the next year or more, how it’s going to get there and how it’ll know if it got there or not. The focus of a strategic plan is usually on the entire organization, while the focus of a business plan is usually on a particular product, service or program.
There are a variety of perspectives, models and approaches used in strategic planning. The way that a strategic plan is developed depends on the nature of the organization’s leadership, culture of the organization, complexity of the organization’s environment, size of the organization, expertise of planners, etc. For example, there are a variety of strategic planning models, including goals-based, issues-based, organic, scenario (some would assert that scenario planning is more a technique than model), etc. Goals-based planning is probably the most common and starts with focus on the organization’s mission (and vision and/or values), goals to work toward the mission, strategies to achieve the goals, and action planning (who will do what and by when). Issues-based strategic planning often starts by examining issues facing the organization, strategies to address those issues, and action plans. Organic strategic planning might start by articulating the organization’s vision and values and then action plans to achieve the vision while adhering to those values. Some planners prefer a particular approach to planning, eg, appreciative inquiry. Some plans are scoped to one year, many to three years, and some to five to ten years into the future. Some plans include only top-level information and no action plans. Some plans are five to eight pages long, while others can be considerably longer.
Quite often, an organization’s strategic planners already know much of what will go into a strategic plan (this is true for business planning, too). However, development of the strategic plan greatly helps to clarify the organization’s plans and ensure that key leaders are all "on the same script". Far more important than the strategic plan document, is the strategic planning process itself.
Jennifer answered the question quite well with the exception of the question of SWOT in strategic planning. SWOT, or Strengths Weaknesses Opportunities Threats, is a common tool in strategic planning to look at specific, targeted agendas for risk management. For example, if Company A is intending to move into Company B’s territory, then a SWOT analysis of company A’s and B’s market positions will give a measurable risk assessment to company A. This will allow company A to assess said risk and decide if the strategic plan is appropriate.
This response has very limited detail and will need to be expanded further.