What is a SWOT analysis? A Beginner's Guide to Analytics from AZ

SWOT analysis is a powerful tool for you to understand the strengths, weaknesses, opportunities and threats you are facing. In business, SWOT analysis helps businesses create a strong foothold in the market. As for individuals, the application of the SWOT matrix will support you to develop a career based on exploiting talents, abilities and opportunities. Today's article mainly focuses on SWOT analysis in business. But wait… What is a SWOT analysis?

Let's learn the terms when doing a SWOT analysis?

SWOT is a term that represents Strengths (strengths), Weaknesses (weaknesses), Opportunities (opportunities) and Threats (threats).

Strengths and Weaknesses represent the internal factors of the business. These are two factors you can control and change. Often these factors are related to company operations, corporate assets, product development, etc.

Opportunities and Threats are external factors, often related to the market and of a macro nature. Enterprises can fully seize opportunities, but must also pay attention and watch out for external challenges that may come. Given these factors, businesses are often unable to control and change, such as competitor issues, input material prices, customer shopping trends, and much more.

SWOT analysis will help businesses have reasonable strategies

A SWOT analysis can help you highlight your strengths, identify weaknesses you need to work on, seize external opportunities, and hedge against challenges that lie ahead. Usually, a SWOT analysis table will be presented in the form of two rows and two columns.

When you take the time to do a SWOT analysis, your business will surely develop the necessary strategies and recommendations when combining the SWO and T factors together. Those are the foundations that the company needs to develop its future direction.

You think your business already has everything it needs to be successful and stand out, but did you know that SWOT can bring new perspectives, and great strategies? that you yourself may not even realize?

Why should we focus on SWOT analysis?

To make a really useful SWOT analysis, often the founders and senior leaders in a business will be directly involved in the process of building them. This is clearly not a job that can be delegated to anyone else.

But sometimes, the senior leadership team is not directly involved in many activities of the business. Therefore, to achieve the highest efficiency, the SWOT analysis strategy needs to have the contribution of a group of members representing many different departments and divisions. Everyone should have a seat on the team that develops the SWOT analysis.

Large enterprises go even further, when they collect information directly from customers for SWOT analysis. You can completely consult with your friends, the accounting department, or even from your raw material suppliers and product suppliers.

Different perspectives can be of great help in formulating and formulating a specific business strategy.

Businesses can completely use the SWOT model to assess the current situation, and to come up with next strategies for themselves. But you should remember, every step of change needs to be unified. If you want to review and evaluate the effectiveness of your new strategy, you can do a SWOT analysis in the next 6-12 months.

For small businesses (like start-ups), SWOT acts as a blueprint that outlines the steps in the formation and development of a business. It's really helpful in determining which step they should take in their arduous journey ahead.

How to build an effective SWOT analysis

For the most complete and objective SWOT analysis, you should conduct the analysis in a group of employees with different views and goals in the business. Management, sales, customer service, even customers can all contribute highly valuable comments. In addition, the SWOT analysis process is an opportunity to engage employees and encourage them to participate in and adhere to the business strategy.

The first thing you need to do here, is to gather a group of people from many different departments in the business to build a SWOT model. It is not necessary to spend all day brainstroming, just one to two hours is enough for this job.

Consulting with people with different expertise will make your SWOT analysis truly valuable.

As mentioned above, doing a SWOT analysis is no different from a brainstorming meeting. Everyone should write down their own ideas on paper. This helps prevent everyone from focusing too much on a particular idea, and ensures that everyone's opinions are heard.

After 5 to 10 personal ideas, all stick their own sticky notes on the wall and group the ideas together. You should allow people to add new ideas on top of old ideas. This helps to generate unique perspectives with a whole new perspective.

After grouping the ideas together, it's time to rank them. You can completely use the method of popular vote to determine which ideas are most important and necessary. Of course, this can raise some minor arguments.

Essential questions in SWOT analysis

Here are a few questions to keep in mind when developing a SWOT strategy:

1. Strengths – Strengths:

The strengths of a business are often internal factors that can help the business grow and build its advantage over competitors in the market. These factors can be controlled by the enterprise.

What processes are businesses adopting that can help them become successful?swot . analysis

What human strengths does your business have, such as professional skills, relationships, education, job skills, reputation,...?

What are the physical strengths and assets that the business owns, such as customer files, facilities, finance, technology, patents,...?

What competitive advantage does the business have compared to competitors in the market?

2. Weaknesses – Weaknesses:

Weaknesses are the unfavorable factors that your business is having. You need to overcome these weaknesses yourself, if you want to compete with competitors in the market.

What points do businesses need to overcome to compete better?

What process does the business need to improve?swot . analysis

What assets does the business need to supplement, such as money or equipment?

What gaps exist that need to be filled in about the people working in your business?

Is the location / headquarters where your business is operating suitable for future development?

3. Opportunities – Opportunities:

The main opportunities are the external environmental factors that can greatly help the success of your business in the future.

Is your business' focus market growing? Is there an existing trend for customers to consume the product you are offering in the future?

Are there any upcoming events that your business can capture to grow?

Is there a change that could have a positive impact on your business?

As it grows, will customers appreciate your business?

4. Threats – Challenges:

Challenges are external factors that can adversely affect the operation of your business. Often these factors you cannot control, you can only predict and devise strategies to deal with them.