Everything You Need to Know About SWOT Analysis
They say that in order to sell, you have to know your product very well; The same applies to you, knowing all the details of you – both good and bad – will always mean something positive. SWOT analysis is the best tool for this.
It is used in business, regularly, but it can also be used in any project or goal you have in mind, even to assess your personality. It is very quick to elaborate, it does not need “big” materials – just pen, a space to write and time alone to be very sincere with you.
Its benefits are many: it will help you create strategies to achieve your goals, namely what you are good at and what you have room for improvement, what actions you should take … Everything in a clear and organized way.
What is SWOT Analysis?
The acronym SWOT is an acrostic that allows you to assess the Strengths, Weaknesses, Opportunities, and Threats of a specific situation. It is used either by individuals or companies to assess one’s self or to strategically analyze their situation in the market.
It is a scheme in which you have as a central point what you want to achieve and in four basic axes the factors that surround it to obtain it.
The SWOT matrix is an analysis tool that can be applied to any situation, individual, product, company, etc., that is acting as an object of study at a certain moment of time.
It is as if an “x-ray” of a specific situation of the particular thing being studied is taken. The variables analyzed and what they represent in the matrix are particular to that moment. After analyzing them, strategic decisions must be taken to improve the current situation in the future.
The SWOT analysis is a tool that allows you to form a picture of the current situation of the object of study (person, company or organization, etc.), thus allowing you to obtain an accurate diagnosis that allows you to make decisions based on the objectives and formulated policies.
The SWOT analysis matrix is an analysis tool that is used to evaluate any object of study at a given time. The acronym SWOT is an acronym that distinguishes strengths, opportunities, weaknesses and threats.
Uses of SWOT Analysis
SWOT Analysis is used as the basis for decision making. Sometimes it is enough to perform some superficial analyzes to perform a quick analysis, but when what is sought is to sustain different actions and strategies over time, many different factors available are analyzed, the study of which requires an exhaustive analysis. That is where the SWOT Analysis appears in all its magnitude.
Some people mistakenly believe that the SWOT analysis is only relevant for business issues since it is a tool that acquires invaluable value for personal, organizational and human team-building issues.
The SWOT analysis may seem simple in a first instance of approach, but nevertheless, when it is put into practice, it acquires another complexity.
In the middle of the last century, as companies were failing, questions began to try to determine if there was a common issue regarding lack of planning. Knowing why planning had failed was only part of the puzzle: companies also needed to know what could be done to change the failure and make it a success.
Although the companies had corporate planning managers, they discovered a problem: their planning did not work, or rather, the way the planning was being implemented did not work. Companies were spending a lot of money paying these managers and they didn’t see dividends from their investments. For this reason, they did what all good companies do; They took a look at what was happening in their business. They not only looked at the problems but also made the decision to change.
In order to be certain of how to face this new reality, the Stanford Research Institute carried out an investigation that took 10 years, from 1960 to 1970. The members of the research team were Dr. O. Benepe, M. Dosher, A Humphrey; Birger Lie and R. Stewart.
Companies would depend on this research to analyze what was happening. They knew that if they did not act on the results of the investigation and made some important changes then their companies would also fail.
When the conclusions of the study were presented in 1964, it was changed from the acronym SOFT to that of SWOT. The SOFT analysis meant Satisfaction, Opportunity, Guilt and Threat, and it was the analysis that was performed at that time. SWOT means Strength, Opportunities, Weaknesses, and Threats.
By analyzing the history of the SWOT analysis matrix, and by looking at today’s corporations, we find that many companies have failed due to lack of planning. This is nothing new, and it is exactly the reason for the original research that gave rise to this matrix of analysis.
The dynamic contribution provided by the SWOT matrix is indispensable. Businesses never remain static. They are always on the move. What you should try to do is that businesses always move forward and positive, or will inevitably move backward. Just look at companies that refuse to move forward with changes in the quality of service, and see how many high-end stores have closed.
SWOT Analysis – The Business way
After having carried out the first SWOT analysis, it is advisable to carry out successive analyzes periodically with the first one as a reference, in order to know if we are meeting the objectives set out in our strategic formulation. This is advisable since the external and internal conditions are dynamic and some factors change over time, while others undergo minimal modifications.
The frequency of these update analyzes will depend on the type of study object in question and in what context we are analyzing it.
In terms of the Marketing process in particular, and the administration of companies in general, we will say that the SWOT matrix is the link that allows us to move from the analysis of the internal and external environments of the company towards the formulation and selection of strategies to follow in the market.
The primary objective of the SWOT analysis is to obtain conclusions on how the object studied will be able to deal with changes and turbulence in the context, (opportunities and threats) from its internal strengths and weaknesses. That constitutes the essential first step to perform a correct SWOT analysis. Accomplished the same, the following is to determine the strategies to follow.
To begin a SWOT analysis, a crucial distinction must be made between the four variables separately and determine which elements correspond to each.
At the same time, at each point of time in which said analysis is carried out, it would be advisable not only to construct the SWOT matrix corresponding to the present but also to project different future scenarios with their consequent SWOT matrices and to propose alternative strategies.
Both strengths and weaknesses are internal to the organization, so it is possible to act directly on them. On the other hand, the opportunities and threats are external, and you can only have interference with them by modifying the internal aspects.
Importance of SWOT analysis in companies.
Decision-making is a daily process by which a choice is made between different alternatives in order to solve the most varied situations at work, family, sentimental, business, etc., that is, decisions must be made at all times. .
To make a wise decision on a particular issue, it is necessary to know, understand and analyze it, in order to give you a solution. It is important to remember that “without problem there can be no solution.”
Therefore, and before making any decision, companies should analyze the situation taking into account the particular reality of what is being analyzed, the possible alternatives to choose, the opportunity cost of choosing each of the possible alternatives, and the future consequences of each election.
The significant and worrying thing is that there is a large number of companies that face their problems making decisions automatically and irrationally (not strategically), and do not take into account that the result of a bad or good choice can have consequences on success or company failure.
Organizations should carry out a more structured process that can give them more information and security for decision making and thus reduce the risk of making mistakes. The process that companies should use to know their real situation is the SWOT Analysis Matrix.
The importance of preparing and working with a SWOT analysis matrix is that this process allows us to proactively and systematically search and analyze all the variables involved in the business in order to have more and better information when making decisions.
Although the ideal strategic tool to capture the mission, vision, goals, objectives and strategies of a company is the Business Plan, by performing the SWOT analysis correctly, Offensive, Defensive, Survival and Reordering strategies can be established necessary to meet the business objectives.
Before we can examine the details of the different variables to be analyzed in a SWOT analysis matrix, we need to understand the fundamentals of the matrix.
The analysis matrix normally used is in a grid format. You should always include the name of the object of study. You can have a list of questions in each section and an area to answer the questions. There is no limit to the number of questions and answers you have, but the more in-depth questions are asked, your answers and analysis will provide a superior result.
The SWOT analysis can be performed at any stage where the object of study to be analyzed is found.
The object of study can be a person, a country, a sports team, a business, a work team, any area of a company, a proposal, etc. This should not be limited to an analysis of an object of own study, but can also be used to analyze the business of the competition. For individuals, SWOT analysis is best used when they are at crossroads which could change the course of their life journey, such as periods of confusion between choosing courses to study in school, settling for a kind of job, etc.
A SWOT analysis will provide current knowledge of all areas of the object of study being analyzed, and this is precisely what allows a good basis to analyze your strategy, business proposal, position and direction of your company, and even discover What ideas are worth following.
As we have said, the SWOT analysis is simple and can be carried out by anyone. The complexities of the analysis will be given in the depth with which the variables are studied and the objectivity with which it is performed.
In the SWOT analysis matrix, the information will be placed in a logical order, and this will help to better understand your company, also allowing you to have a greater visualization of the ideas being considered.
Beyond having chosen to make decisions based on the results of the SWOT analysis, many people find it difficult to complete the analysis due to lack of strategic thinking. These are the people who make their decisions based on what they have always done. Or they are based on their instincts (which can be differential), but sometimes we have to accompany with objective tools to have more options to decide better.
It must be understood that the SWOT analysis matrix is only a tool, but that it is very powerful when used correctly.
Imagine for a moment that it would be good if, before making any kind of decision about any aspect of our lives or business, we had a SWOT analysis matrix available with all the variables analyzed. When you analyze in-depth and discover where the object of study is today; You can make informed decisions for any changes that need to be made.
The results of the SWOT analysis allow visualizing the reality of the business. It will also provide a list of action points – which you must follow, or in some cases – things that the company should avoid.
One of the applications of the SWOT analysis is the one that can be done on a personal level.
Every individual can make a SWOT analysis of their person in general or analyzing some aspect of their life, such as work SWOT, vocational SWOT, sports SWOT, and the personal SWOT itself that has to do with social and social aspects. personality.
This is the time to start listing all the skills you have. What did you learn in school? What is the strength you use all the time?
Remember to include all the skills you use at work, especially if a certain task is always assigned.
Have you considered the contact list as one of your strengths? There will be times when you cannot help a person with their skills, but you can help them by contacting someone they know.
What can you do better than others?
Do you have any resources available that allow you to act as a position of strength? You must use a certain product or use a method that could be used to help other people.
A resource that many people want to have a lot is time. Imagine if you are unemployed, retired or part-time. He has a car and can use it as a work item. Time is a valuable commodity that many people do not have.
Another strength that many people would love to have is patience. Are you patient and can you spend hours and hours teaching the same thing to a person? There are people with learning difficulties who would greatly appreciate someone explaining things in simple terms, several times if necessary until they have understood.
If possible, ask other people what they see as their strengths. A good test is that some people describe some of their strengths and then compare them and compare with those listed above.
The secret here is to be as objective as possible. If you don’t know where to start, try to compile a list of your features.
Not all of its characteristics are strengths.
- Analyze your personal life and emphasize your strengths.
- Remember to include the resources, the orientation to the results and the attitude to take the process forward.
This is even more difficult than trying to see the weaknesses in your business. You could be someone who has been told how useless you are, or who will never ascend to anything. In some cultures, this is deeply rooted and is not seen as a weakness but becomes part of the character that can never be changed.
That’s not true. You can become a stronger person. You can take control of your life. It is time to be pragmatic.
Look at your life and start listing all the things you want to improve. You may not have all the solutions right now, but the first step is to create a list.
When a person has an addiction, he knows he has an illness. The someone knows and admits to having an addiction so he works to heal himself. But what about people who know they are doing things that are not good for them? These are the things we should focus on.
We know that eating certain foods at noon will make you feel sleepy for the rest of the day. If your job means you have to be alert, the answer is simple: avoid that kind of food.
Again, ask your friends and family what they see as a weakness in your life. You should clarify why you are asking for this and do not accept those comments where people are only finding the mistakes you make.
You have to remember that not everyone is good at everything, and you will find that you cannot do everything and you will find that you cannot do everything and do it well.
“Truth hurts”. People may want to say good things, but when asked to be specific, they will say things that could harm you.
You may have heard comments in the past, but I thought you were being mean, but now is the time to face the harsh realities of what is happening. It’s time to see how much you want to know the truth.
Learn to discern between someone who tells you a truth with a correct attitude in his speech, from someone who tells you a truth but with anger, hate, and disdain. When someone is angry, it is difficult to appreciate any reflection of the truth in their statement.
You have to realize that your ego is going to be attacked during this exercise, but also that you will come out of this as a stronger person.
- Value your personal life and visualize any weaknesses you may have.
- Ask friends and family to tell you how they see it. (52 and 53)
In your personal life, you will find that opportunities are also around you, but again you need to identify those that are relevant and then take action.
What are the opportunities we face? Are we aware of all of them? It is time to make a list and see what is happening in your life.
Trends come and go, but if you look at them you will see how they will open various opportunities.
Technology is an area that is always changing, are you aware of the opportunities that you can provide or accompany from your knowledge or experience?
When looking at the larger picture of your Foda analysis, is there any strength or weakness that you can use as an opportunity too?
Returning to the example of the car salesman, who has extensive knowledge about maintenance, could they have the opportunity to open a cheap repair shop to help other customers? Could they convey their knowledge by running some workshops to teach other clients how to make their own basic repairs?
When a person looks for opportunities in life, he can find them.
- Diagnose your personal life and visualize the different opportunities you have available every day.
Personal threats can be very different from business threats, and all they will do is prevent you from reaching your full potential if you don’t recognize them and take action.
You may have a job and it may be something you like to do. However, with changes in technology you need to learn to use certain tools to see yourself in the same job in twenty years. Yes, it can be a problem to get used to something you’ve never used before, but if you can’t overcome your fear, then you may find yourself without a job as soon as possible.
Many people love to travel, and for some, the idea of going around the world is something they dream of. But they know they need the money and also some kind of ability to work around the world.
What are your dreams? How can you achieve them? What threats prevent these dreams from coming true?
Talk to the young people who are taking a sabbatical year, and see how they have sacrificed to see their dreams come true.
If you want to go to remote Africa to have volunteer experience, what are the obstacles you face? Perhaps, the first is that your parents are worried about you or your child. But it is not only for being away from home but also for being in a remote place where there are no phones or internet. How do you deal with this? One answer is to get as much information as possible to give to your parents.
Another is to talk with people who have been there and get them to share their experiences with their parents too. Peace of mind is the solution to these obstacles and threats.
- Work in your personal life to address the threats that prevent you from realizing your dreams.