25 November 2022
What is SWOT Analysis? How is SWOT Analysis Performed?
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SWOT analysis will enable you to gain an advanced strategic understanding of your business. It is a technique where you can deal with the positive and negative factors in detail about the work you will do or the project to be started while taking important steps for your organization. SWOT consists of strengths, weaknesses, opportunities and threats. SWOT analysis gives you a better understanding of how all these factors can affect the functioning of your organization.
Briefly, SWOT analysis is an analysis study carried out with the aim of creating a plan and strategy for the future as a result of detailed comparison of strengths, weaknesses, opportunities and threats placed in a four-column table.
Why SWOT Analysis is Important?
SWOT analysis enables you to uncover situations that may have negative consequences for your organization's performance and to better understand risky processes. You need to proceed with the SWOT analysis in a careful and systematic manner. In this way, it will provide new information about where your business is positioned in the industry, and it will also help you develop exactly the right strategy for every possible situation.
For example, you may be aware of some of the strengths of your business, but you may not realize how much risk they actually involve until you evaluate these strengths with weaknesses and threats.
Likewise, you may have reasonable concerns about some of your weaknesses, but through systematic analysis, you can find opportunities that were previously overlooked and that you can compensate for.
SWOT Analysis Chart
Sectoral developments related to the fields of activity of your organization are important for the success and sustainability of your company. External factors such as monetary policies, market changes and access to suppliers are among the categories you can use to build a list of opportunities and weaknesses.
The listing, called a SWOT analysis table or matrix, can be created by dividing a sheet of paper into four equal parts. After data reviews and internal information exchange, you can set the pattern you need for a successful SWOT analysis evaluation by writing the predicted questions about strengths, weaknesses, opportunities and threats to the relevant fields. So what kind of questions should you ask in which headings for a successful SWOT analysis?
| Strengths | Weaknesses | Opportunities | Threats |
|---|---|---|---|
| *What are the features that make our products or services stand out? | *What are the weak points of our products or services? Are there any aspects that need improvement? | *Do our products or services have the features to meet the needs and demands that may arise in the future? | *Is there a possibility that our weaknesses will turn into situations that will pose a danger to our company? |
| *Is our level of technology and innovation sufficient? | *What kind of problems do we have in adapting to technological developments? | *How can we incorporate new technological developments into our own business processes and services? | *Are we prepared until the moves of our competitors to take one step ahead of us? |
| *Which aspects of our competitors might think we are strong? | *What are our weaknesses that our competitors are aware of? | *How can we turn our opponents' weaknesses into our own advantage? | *Do we take precautions against an economic crisis that may occur in the future? How prepared are we? |
How to do a SWOT Analysis?
A SWOT analysis can be put into action before and after the analysis of the four components and broken down into several steps with the elements. In general, the following steps should be followed when performing a SWOT analysis:
1- Setting a Goal
A SWOT analysis can be done comprehensively but doing it directly with a purpose will make the data you collect more valuable. For example, the purpose of a SWOT analysis may be whether to promote a new product or a service. An on-point SWOT analysis will guide your company to achieve its targeted success at the end of the process. In this example, the SWOT analysis is expected to help determine whether the product should be promoted.
2- Gathering Resources
Every SWOT analysis is different. Companies may need different data parameters in order to perform a successful analysis by bringing together different SWOT analysis table examples. The analysis should begin by understanding what information is available, what data limitations you face, and how reliable the external data sources are. In addition to the data, the combination of employees to be included in the analysis needs to be accurately determined. An employee who works in sales and customer relations can be more connected with customers and suppliers, while employees in human resources or production departments can have a better grasp of developments within the organization. Having a broad perspective will increase the likelihood of adding value to your organization.
3- Exchange of Ideas
For each of the four components of the SWOT analysis, the group of people tasked with performing the analysis should begin listing the ideas in each category. Examples of questions to ask or consider for each group are as follows:
Internal Factors
Developments within the organization are a great source of information for identifying the strengths and weaknesses of the SWOT analysis. Examples of internal factors include financial efficiency, human resources, tangible and intangible (brand name) assets, and operational efficiency.
Here are some sample questions to ask to list internal factors:
- What are we doing well?
- What is our strongest asset?
- What are the aspects we need to improve?
- Which are our lowest performing product groups?
External Factors
In addition to internal factors, external factors are also important for the success of a company. External influences, such as monetary policy, market changes, and access to suppliers, are essential for building a list of opportunities and weaknesses.
Here are some sample questions to ask to list external factors:
- Which trends are prominent in the sector?
- What demographic are we not targeting?
- What is the number of our competitors and what is their market share?
- Are there new regulations that could potentially harm our services or products?
- What are the advantages of our competitors that we cannot provide in our products or services?
4- Examining the Findings
By refining the thoughts everyone has, a company can focus on only the best ideas or the most likely risks for the company. At this stage, involving top management to help align priorities allows analysis participants to clarify their ideas.
5- Developing a Strategy
The final item is to turn the SWOT analysis into a strategic plan, with a list of strengths, weaknesses, opportunities and threats.
Performing the SWOT analysis, the team takes the marked list in each category and creates a synthesized plan that provides guidance on the original goal. For example, the company debating whether to launch a new product may have determined that it is the market leader for its current product and has an opportunity to expand into new markets. However, downsides such as rising material costs, shrinking distribution lines, the need for additional staff and unpredictable product demand may outweigh the strengths and opportunities. The analysis team can develop a strategy to reconsider the decision within six months so that costs are reduced and market demand is more visible.
As a result, SWOT analysis is a tool that can be used to identify the strengths and weaknesses, opportunities and threats of a company or project. It is important to understand all these factors and make inferences after the analysis to make informed decisions about the company's future investments and strategies. It is helpful to do a SWOT analysis before making important decisions about your company, as SWOT analysis will make it easier for you to compare the potential risks as well as the returns of an action plan.
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