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Earlier, business was described as buying and selling of products and services. But as the time had passed, the nature and concept of business has changed. There are many more aspects to business than there were back in the old days. Business is an economic activity, which is related with continuous and regular production and distribution of goods and services for satisfying human needs (Akrani 2011). It is a process through which companies make profit and consumers are provided with products they need, want and desire. Business teams are continuously indulging themselves in research and development to make innovative products that can satisfy customers before their competitors can do.
Every business is prone to risk and uncertainties. The real capability and strength of any business lies with its capacity to produce products and provide services and maintain its main objective of profit maximization, when the market is under uncertain condition. Risks like theft or fire damage can be covered through insurance but smart strategies are required to get through change in consumer demand or fall in price. Good businesses should have alternative plans incase of any adverse situation. The duty of business is not limited to providing goods. It knows the value of its customers, employees and society. Therefore the modern businessmen are well aware of the importance of CSR. That is corporate social responsibility. Now a day's businesses like to portray themselves as service-orientated and not only profit-orientated.
Every business organization, whether sole proprietorship, partnership or ltd. companies, have proper legal obligations to fulfill before it can become official organization. Once it has been formed it is divided into different departments like marketing, HRM, finance, management and operations research that help maintain daily activities.
Marketing is the field of business that provides companies with ability to sense what their customers need and how it can be communicated to them that their company can provide it and hence satisfy the customers need. Marketing carries out, in detail research through demographic, surveys and stats to find out the customer demand and potential target markets. The effect of good marketing can be fruitful. It creates value for the customer and builds brand awareness. Through different marketing strategies it can be ensured that the products are provided to the customers effectively and efficiently. Powerful marketing strategies ensure quality management and sustainable profit growth, which builds and nurtures long term customer relationship. Business with a proper marketing department, which is effective, are more likely to grow and prosper as compared to others.
According to Demands media (n.d), the overall marketing umbrella covers advertising, public relations, promotions and sales. Once a business produces something, it would want maximum potential customers to know about it. Advertising helps achieve this objective through banners, TV advertisements, newspaper, magazines etc. When more number of people have awareness about the product, the sales are bound to rise. Promotion attracts even more customers as they are offered deals that could benefit them more and would add value to the purchase. One of the aims of marketing is to create brand awareness and a good image of the company. Once the company fulfills the customer's expectation, it achieves a good image and public relations, which leads to growth and customer loyalty. Now in order to make these things effective it is important for the business to have a clear, well defined marketing plan that includes different action such as SWOT analysis, PEST etc., that will help achieve different marketing objectives.
Swot analysis is the part of marketing plan that helps identify the current position of the business in the market. It is a sort of assessment tool that can highlight what the companies plus points are and what the company might lack. SWOT stands for Strengths, weaknesses, Opportunities and Threats. J.Nuttal (2001,p.231) explains that strengths are the positive internal factors about the business and its products. Weaknesses are negative internal factors. Opportunities are external potential benefits while threats are external factors that have the potential to harm the business.
SWOT analysis is a powerful tool, which helps recognise both internal and external situation of the company. In order to be successful the company cannot avoid the external threats and opportunities and limit itself to internal weaknesses and strengths. The main purpose of SWOT is to look out the wall and gain maximum benefit from opportunities, reduce weaknesses, and face threats by enhancing its strengths.
SWOT analysis is being used in almost every business organization for the purpose of understanding the market, finding growth opportunities, developing advertising and promotional strategies as well as an insight to the competitors move. It proves to be very advantageous for the business as it provides information about strategic planning and helps develop list of objectives. Detailed analysis of past and present can also be obtained which helps planning the future.
There are certain limitations where SWOT might not work. For example unpredictable situations like natural disasters, Government legislation, inefficient management, faulty products or lack of research and development in the organization. Regardless of its limitation, this tool should be adapted by the businesses, as it will save time, cost and provide maximum growth and ensure profitability.