How to do SWOT analysis?

When developing a marketing strategy, the most commonly used SWOT is to identify internal strengths and weaknesses, external opportunities and threats, and then plan a strategic breakthrough. When conducting a SWOT analysis, keep four key factors in mind to help you conduct a complete and practical analysis.

Where did the SWOT come from?

In the 1980s, Heinz Weihrich, a professor of management at the University of San Francisco, proposed the SWOT analysis, which, as the name suggests, consists of four letters S, W, O, and T, representing Strength , Weakness , Opportunity and Threat.

Internal and External Factors of SWOT

Strength and Weakness are mainly the “internal” status of the analyzed business or product, such as strong brand, loyal customer base and unique technology; however, the price is relatively high and the company is undercapitalized.

Opportunities and threats are the state of the “external” environment of the analyzed business or product. Opportunities may be support for new regulations, good relations with suppliers, bank credit support, etc. Threats may be payment delays from sellers , competitors forming alliances, slowing market growth.

When to do a SWOT?

When is a good time to do a SWOT analysis? There are many answers.

• It could be every season, before every new product development,
• when a company is considering a transformation, or
• when it wants to change its plans during project execution.

It is widely used in a combination of applications such as developing corporate strategies, focusing resources, strengthening own product strengths and compensating for weaknesses, while using internal strengths to defend against external threats, and taking advantage of external opportunities to eliminate internal weaknesses.

How to Perform SWOT Analysis

A typical SWOT analysis is a matrix with four quadrants listing the relevant influences that represent the four letters of SWOT.

Identify Strengths and Weaknesses

When listing strengths and weaknesses, internal factors must be considered as a whole, covering the following areas: financial resources (capital, revenue sources, investment opportunities), physical resources (location, facilities, equipment), human resources (employees, volunteers, target audience), access to natural resources, trademarks, patents and copyrights, and current processes (employee programs, departmental hierarchies, software systems).

When identifying the internal factors: strengths and weaknesses, you can ask yourself the following questions from the aforementioned perspective:

Strengths:

• What are the company’s specialties or features that the competition does not have?
• What products/fields is the company familiar with?
• What kind of resources does the company have?
• What can the company do that others cannot do or do better than others?

Weaknesses

• What is the company particularly unfamiliar with?
• In what areas does the company have fewer resources?
• What is the company less able to do?

When identifying the external factors: opportunities and threats, you can ask yourself the following questions:

Opportunities

• Where can you apply your strengths?
• How are your customers and their needs changing?
• How is technology changing your business?
• Are there new markets for your strengths? (e.g. foreign)
• Are there new ways of producing your products?
• Are your rivals’ customers dissatisfied?

Threats

• Are customers able to meet their needs with alternative products?
• Are customers needs changing away from your product?
• What are your competitors developing?
• Are your rivals improving their product offerings or prices?
• Is new technology making your product obsolete?
• Is your cash-flow and debt position healthy?
• Are your employees satisfied?
• Is turnover high?
• Is new competition coming?
• Are sales growing slower than the industry average?

How to conduct SWOT analysis?

As we mentioned before, SWOT refers to Strengths, Weaknesses, Opportunities and Threats. It is a way to summarize your company’s current situation and help develop plans for the future. Whether you or your team is planning for the future for a specific product, job, person, or any other area, you can perform the SWOT analysis process by following these steps

1. Make a list of all the strengths that exist right now. Then in turn, list all the weaknesses that exist now.
2. List all the opportunities that exist in the future. Opportunities are potential strengths in the future. Then, in turn, list all the threats that exist in the future. Threats are potential future weaknesses.
3. Action Plan – Review your SWOT matrix with a view to developing an action plan to address each of the four areas.

Develop an action plan

When you use a SWOT analysis for planning, you align the positives to help capitalize on opportunities and identify gaps in the negatives that must be improved or managed. Getting insight from a SWOT analysis requires a strategic leap to look at the connections between categories (e.g., where a strength can help us mitigate a threat), as well as looking at trends as a whole.

1. Strengths – Keeping overhead low by changing the compensation structure to balance base salary and performance-based bonuses.
2. Weaknesses – Learning, researching and implementing a project planning system and following that system.
3. Opportunity – Testing new markets with one existing product first
4. Threat – Bringing business partners into a performance-based commission plan

How to use the results of SWOT?

1. Strengths need to be maintained, built upon, or exploited.
2. Weaknesses need to be remedied or stopped.
3. Opportunities need to be prioritized and optimized.
4. Threats need to be resisted or minimized.

Need a free online SWOT analysis software?

Introducing Visual Paradigm Online Free Edition, a free online charting software that provides great SWOT analysis tools for effective strategic analysis. This SWOT analysis software enables you to create professional SWOT matrices quickly and easily. As a web-based SWOT analysis tool, VP Online runs on the web and is compatible with all browsers.

SWOT Examples and Templates

 

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Amazon SWOT Analysis

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