Strengths are strong functional areas where organization are performing well whereas, weaknesses are the underperformed areas of an organization that could be improved in a different ways. Strengths and weaknesses are internal therefore, categorize as controllable factors that are performed well or poorly. These factors take birth in management, marketing, finance, human resource, research & development, information technology and manufacturing functional areas of business.
An organization should identify and evaluate internal strengths and weaknesses in timely manner so, it could make the strategies to get advantage to capitalize on internal strengths and reduce the internal weaknesses.
Strengths and weaknesses are determined by:
1- Elements such as natural resources and reputation in industry.
2- Comparative analysis with competitors.
3- An organization objectives
4- Comparing to past records of company. For examples, Assets increased by 10%, revenues and profits increase by 20%.
5- Ratio analysis
6- Benchmarking with industry.