Free «Aggregate Expenditure» Essay Sample

SWOT analysis is a tool used to audit and analyse the strategic plans and opportunities in a business institution. This analysis is based on the strengths, weakness, opportunities and threats of an organization. The strengths and weakness are mostly the aspects that result to limitation for opportunities since the competitors use the business weakness to take over the opportunities in the market. However the firm may be a threat to itself through its strength that may act as its weakness limiting its opportunities in the market. Resources are inputs used in a firm that helps the firm to carry its operation in an effective and efficient way. However the resources may be a limitation for a firm to obtain the available opportunities. This occurs as a result of poor coordination of the resources such as in the finance sector, managerial sector and information sector, which gives the competitors an opportunity to attack their opponent in an easier way (Blythe, 2004).

Finance is a firm’s resource which may act as its strength as well as a threat to a given opportunity. Lack of financial funds makes the firm unable to use the available opportunity since the firm view the opportunity as a threat. Finance may be available but poor managing might be a limitation. A good example can be a situation when an entrepreneur who owns a small scale firm and a public company, which is a large scale firm, are competing for a given opportunity. In terms of availability of funds the company will be able to get the opportunity since it has more finance sources than an entrepreneur. However an entrepreneur may also get the opportunity in case the company has a poor management of its finances.

The human resource sector, which depends on a management concept, may be a hindrance for an opportunity. In cases where the management of a company is insufficient, unskilled or poorly management results to lack of the available opportunities. A good example is a company, based on managers who were employed as a result of favor and not qualification. Such managers, mostly, tend to do their job in a reckless manner because of the lack of interest or skills to handle the issues (Odies & Michael, 2010).

It is, therefore, the mandate of a firm’s management to ensure that they are able to coordinate their resources effectively so that not to turn their strength into the weakness which will benefit their competitors. The firm should also ensure it minimizes its weakness as much as possible to be able to obtain the available opportunities in the market.


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