The SWOT analysis full form is Strengths, Weaknesses, Opportunities, and Threats. Companies use this framework to determine their competitive position in the industry and plan strategies according to the results. SWOT analysis looks at the external and internal factors affecting the company. It also looks at the company’s current and future potential.
To explain SWOT analysis might be difficult until you try it yourself. SWOT analysis meaning is that it’s basically a useful tool that helps companies facilitate a fact-based, realistic, data-driven way to look at their strengths and weaknesses within an industry. However, during the SWOT analysis, companies need to ignore pre-determined beliefs and grey areas before focusing on real-life situations.
In short, the answer to “What is SWOT analysis?” is not difficult. The main aim of a SWOT analysis is to help an organisation gain absolute awareness of all the factors involved in making business decisions. The organisation needs to perform this activity before committing to company action of any kind. This includes actions such as discovering new initiatives, rewriting internal policies, or changing the course of action for any plan. You use it to discover strategies and recommendations. Leverage your strengths and overcome weaknesses. This article looks at swot analysis examples and swot analysis benefits.
Importance Of SWOT Analysis
Now that you know the meaning of SWOT analysis, let’s understand the benefits of SWOT analysis. SWOT analysis helps you challenge contradictory assumptions and uncover risky blindspots in the organisation’s performance. If you use it collaboratively and cautiously, you will be able to get new insights about where the business stands. You can develop the correct strategies to deal with the current weaknesses and threats.
Now, you must know some of these important factors. For example, you must know about the strengths of your company. However, until and unless you don’t look at the weaknesses and strengths together, you might not understand how those strengths might be unreliable to overcome weaknesses. Therefore, you need to do a systematic analysis.
SWOT Analysis Components
A SWOT analysis has 4 main components – the acronym says it all. These factors drive the company to form a strategy and take an initiative. When the company looks at these positive and negative elements, it realises where there is space for improvement.
The strengths’ part of your analysis includes what the organisation does well, basically the company’s USP. What advantages does the organisation have over competitors in the industry? This is a motivation for your team members.
Weaknesses are the features of your company that need special attention. These might be resources, procedures, and even people. You can include some practices that your organisation needs to avoid.
Opportunities are chances or openings that the organisation can take advantage of. However, you need to claim them. These are usually from outside the organisation and need foresight.
The threats include anything that affects the business negatively from outside the organisation. Some examples are supply chain issues, market fluctuations, and shortage of employees.
These 4 main components are split into two – internal factors and external factors.
Strengths and weaknesses are the internal factors. These experiences and resources are available to you. Here are some common internal factors:
- Financial resources like investment opportunities and sources of income
- Physical resources like facilities, equipment, and location
- Human resources like volunteers, target audience, and employees
- Natural resources like patents and copyrights
- Current processes like software systems – accounting software.
External factors are forces that affect the organisation, company, and individuals separately. These are directly or indirectly connected to the O and T in SWOT – opportunity, and threat. These are some of the most common external factors:
- Market trends like technological advancements or transforming audience requirements
- Economic trends like international trends in finance
- Funding like legislature and donations
- Relationship with partners and suppliers
- Environmental, political, and economic rules
How To Perform SWOT Analysis
Although SWOT analysis might seem like just making lists, it’s so much more! When you begin writing one of the components- Strengths for example- you’ll have to think about the others as well. When you compare all the four lists together, you will notice contrasts and connections that you must highlight. Move between the lists constantly and ensure that all of them are on one page.
The SWOT matrix is a 2×2 box with one box for every aspect of the word SWOT. Every section has some questions in them to get you thinking. Here are some examples for every section:
- What are you good at?
- What are some unique resources you draw on?
- What do you think your colleagues consider your strengths?
- What can you improve?
- What are some aspects that others might see as weaknesses?
- What are some opportunities currently available?
- Can you take advantage of some of the current trends available? What are those?
- Can you turn your strengths into opportunities? How?
- What are some threats that can harm you?
- What are some measures your competitors are taking?
- Are your weaknesses opening you to threats? How?
If you are making a SWOT analysis for your company, don’t stick to your own opinion. Call a group of people with different roles in the company and ask them to give insightful observations. Write down the lists into these grids and look at every area in detail.
You can learn more here about how to perform SWOT Analysis.
Example Of SWOT Analysis
Here is an example of a SWOT analysis to help you understand how to make one yourself. If you have a construction law organisation, here is how you can fill it. Make changes according to your kind of company.
|STRENGTHS Staff members are trained in law and professional engineering Staff adapts to different situations quickly||WEAKNESSESStaff hasn’t gone through formal training to become a mediator Some members haven’t been part of a neutral training party|
|OPPORTUNITIESMost contracts in the company need mediation. Rarely do any mediators in the market have construction experienced mediators work as individuals for small disputes. Staff can offer the advantage of a group of individuals trained neutrally to look at a dispute.||THREATSAnyone can get trained to become a mediator. Other law construction firms can get a mediation service by themselves also. Potential clients have negative misconceptions about mediation.|
Now, you can form a strategy according to this data and work as a team to overcome it.
Now that you know and understand how SWOT analysis benefits your company, how you can overcome threats and weaknesses using it, and how it creates a collaborative environment, what are you waiting for? Make one for your company and encourage higher authorities to organise such meetings often to analyse the company’s efforts.
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