Strategic analysis is a procedure that is carried out with the help of techniques. These practices are based upon defined methodologies. There is more than one method through which strategic analysis can be completed. Of course, SWOT is one of the precise tools that are used to carry out a complete strategic assessment of any company. SWOT is an abbreviation that defines, Strengths, weaknesses, opportunities, and threats.
SWOT Analysis
For any business, a definite plan of action is imperative. The plan of action is basically a roadmap that indicates the approach to be followed in the long-term. In order to get desired results, implementation of an approach or a policy is mandatory. These sorts of policies must be followed for a definite period of time. Before implementing any strategic plan, there are some prerequisites required. In order to have a successful plan of action, requirement gathering should be done at priority.
These requirements are based upon the indicators that would suggest the weaknesses of any company. In a competitive market, every company has to come up with a unique idea. But these ideas may not be enough. For the survival of any enterprise, it is equally important to have experienced and professional resources. Practically, it is impossible to get the desired outcomes without expertise. SWOT analysis is a kind of proposed action plan that requires professionalism and skill set.
One of the attributes of SWOT analysis is that it can give a clearer picture of any enterprise. Furthermore, with such type of analysis, weaker domains of business can be highlighted. To indicate a weaker link in any setup, SWOT can be a perfect tool. It is a kind of mechanism that gives results with precision and accuracy. With SWOT, organizational internal and external capacity assessment can be done. Above all, for a company to be successful, it is necessary to adopt a perfect approach that can give fruitful results. SWOT is basically termed as the blueprint that can summarize any shortcomings with details.
The Relation Between SWOT Analysis and Internal Analysis
To analyze a business, the first step is to identify a process with which analysis is to be done. SWOT is a formula that can consistently monitor any type of business. So, the advantage of using SWOT is that it gives monitoring values of both internal and external variables. The internal processes of any business can be related to market variables. SWOT can give a comparison between internal standards and external variables. For the reason, SWOT is also called “internal analysis”. There is always a margin of improvement in any business. These gradual developments can certainly take the company graph to a higher level.
SWOT is capable of lifting any business enterprise with strengths and weaknesses. Specifically, using this particular tool, improvement points can be listed down. Moreover, SWOT can surprisingly let any business know about the loopholes. The threats to any business can only be nullified with an indication. SWOT attributes can be meaningful in both ways. It can underline a problem and provide a solution at the same time.
SWOT analysis a ready-made solution that is capable of optimizing any business. Before launching any product in the market, there are some variables to be observed. These elements play an important role in successful takeoff. With SWOT, all these factors can be well covered. These procedures are proficient enough to give significant results to all kinds of business owners. Decision making can be made a lot easier with the SWOT implementation.
For any business, both internal procedures and market variables are to be monitored at first. This monitoring can be best handled with the help of SWOT platform. To understand this tool, it is necessary to have a look at the SWOT matrix.
The SWOT Matrix
Matrix is a predefined structure through which you can organize different relationships in a particular manner. The grid design in such a way that it provides unique functionality. The SWOT matrix is based on the following aspects:
- Strengths
- Weaknesses
- Opportunities
- Threats
The below picture by Wikipedia is enough for the elaborate SWOT analysis.
The above components of SWOT have their own decisive importance. In SWOT analysis, strengths and weaknesses considered as internal domains. These areas have core values. For a company, an audit has great worth. Analyze the strengths and weaknesses first. For a company, any wrong estimation can lead to financial disaster. Tools like SWOT are helpful to generate results and this practice used and trusted at any level. Multiple firms can be hired in order to scrutinize the status and standing of a company.
Marketing Strategy of Eveready
Just like the internal factors, there are external factors necessary for company valuation. These elements have a direct influence on a company. Opportunity is an integral part of SWOT. These prospects can vary a lot with the status of the market. Policies adopted by the governments have an impact on the external factors. The components like opportunities can rise to a greater value with positive policies. Once the policies are favorable, it can be greatly beneficial for the company. On the other hand, there is another prospect that can come along with opportunities. There are different potential threats in the market that can hurt any business to a greater extent. SWOT gives a roadmap to enterprise with which they can anticipate threats also simultaneously.
For the growth of a company, all the four factors involved in SWOT required. All these elements can collectively affect the performance and operations of a company.
SWOT is a conceptual design that can make decision making easier. Let us have an example in order to understand how SWOT is actually helpful in making the decisions. For any enterprise, expansion is important. While considering expansion as an opportunity, there is another factor that comes into play. According to the model followed in SWOT, opportunity can bring potential threats with it. Likewise, if an enterprise is looking for a new product launch, then it needs a lot of work by marketing staff before the introduction. An enterprise must have the capital to expand the resource and strategy. Failing to get the required capital means there is no way to launch a product.
In this example, the SWOT matrix model has helped an enterprise in making a quicker decision considering all favorable and unfavorable factors.
Elements of SWOT Analysis
Strengths
As a company, you need to look at your positive domains. These domains can be a supporting factor in expanding any business. For decisions making, strengths will have a key role to play. For analysis of a business, you require the capacity valuation. If you do have a plan of action, a stronger domain and the capacity to implement, then you can move on with a plan. Otherwise, if you are short of strength, then moving forward will not be a wise decision. This is what SWOT suggests to all business enterprises.
Example of Strengths in SWOT Analysis
What makes your organization different than others?
Why preference should be given to your organization?
Do you offer competitive pricing and resource as well?
Where does your company stand in the market?
Are you capable of offering promotions to clients?
Do you have a USP (Unique Selling Proposition)?
Examples of Strengths – brand equity, supply, modernization, customer trustworthiness.
Weaknesses
For a successful operational role model, every enterprise should keep an eye on weaknesses or loopholes. This element, in particular, can certainly indicate and reflect an opportunity to work on. Weaknesses are indicative of the fact that an enterprise can turn down an opportunity considering analysis results. So, let us have an example here. If you are running a financial consulting firm, you must have the required resource with skill and expertise. Not having both means that you don’t have enough capacity to run the firm. Control and convert these shortcomings in a positive sense. If you wish to hire professionals for your firm, you first need to establish a resourcing channel. These little advancements can lead your business to a better position.
Example of Weaknesses in SWOT Analysis
Do you have a specialized resource for company operations?
What is your financial position at the moment?
Whom you are competing with?
How strong is your organizational structure?
What is the trust level of your stakeholders?
How do you get feedback from the market?
Does your organization have a professional culture?
Example
Nokia was one of the most popular brands with its own operating system called Symbian. The OS used by the world-famous cellular brand considered to be its strength. But with the passage of time, Nokia didn’t realize that they need to upgrade their OS. As a result, Android catered to the whole cellular market with a new flavor of OS. Now, we need to understand that Nokia thought that Symbian was their greatest strength. However, in actual its OS turned out to be a nightmare for Nokia. At the later stages, users didn’t found Symbian much attractive. Eventually, Nokia’s sales dropped to dangerous levels. Nokia couldn’t sustain market change and vanish. So, with this example, one can understand the role of weakness and its identification.
Opportunities
The bottom-line of SWOT analysis is opportunities. As a result, taking the right opportunity at the right time will definitely make a huge difference. Certainly, considering SWOT, an enterprise must keep on digging new ideas. Ideas can create an opportunity. SWOT suggests a definite approach towards each component. Above all, decision making is one of the common factors that have implications. Whenever there is an opportunity you should grab it immediately. SWOT help in making a decisive approach. So, it is better to make a whole list of possible openings. Studying all the openings will be a viable option. Come up with an opening or an opportunity that can nullify your weakness in the long-term. Always try to pick an approach that uses the best strengths that you already have.
Prospects for an enterprise can be best understood by the external factors. In a market, competitors can be an external factor. The same is the case with governmental policies and rules. Both these features treated as external factors. Last but not least, in SWOT, you must use established and powerful strategies. These plans are also one of the external factors that can play a significant role.
SWOT analysis business strategy management, business plan
Example of Opportunities in SWOT Analysis
Do you have creative ideas to implement?
Does your product have an established worth?
Are your products introduced to a niche market?
In terms of technology, do you have something new?
Are you willing to do collaborations?
In there any chance you can take over a smaller company?
Do you have any Product line extensions?
Example
Bigger enterprises always think out of the box. Consistent changes and up-gradation are inevitable now. In order to understand opportunity elaborated in the SWOT model, eCommerce is the best example Ecommerce is now a lifeline for enterprises. Using an online channel, companies can reach to every kind of customer. The world is a global market now, eCommerce is a bridge between enterprises and the customer. It is a kind of platform that is not only cheap but at the same time offers you are a great deal of exploring prospects. If we look at the SWOT matrix, we will realize that every quadrant gets you closer to an appropriate decision.
Threats
In SWOT analysis, threats can have a lot of external influence. Threats can differ in different circumstances. Threats can also have diversified reasoning. While moving forward in a positive direction, an enterprise has to keep on tackling the threats. Hence, the important thing to notice here is that enterprise operations must not influence by the threats. Shielding approaches needed against potential threats.
Example of Threats in SWOT Analysis
- Increased number of competitors in the market
- Fluctuations are prices
- Amount of credit floated in the market
- Conventional and old technologies
- Expensive cost of production
- Unproductive processes and steps
- Political and environmental pressure
Example
Earlier people used to handle tasks with high processing machines like computers. Later, these machines replaced with more powerful and smart computers called laptops. The designs of laptops were intelligent, unique and portable. But with the passage of time, there was another competitor arrive in the market. A smartphone was a completely new and brilliant idea. According to the theory followed in SWOT, smartphones were a potential threat to the desktop and laptop industry. With this example, anyone can understand how a potential threat can replace a company or a product in a market.
Importance of SWOT Analysis – Advantages of SWOT Analysis
Gives viewpoint of organizational competency- Certainly, the SWOT design is capable of giving a viewpoint of organizational competency. Hence, with components, it is easier for an enterprise to gather useful information. Internal elements like strengths characterized by SWOT.
Define weaker links and its solutions- SWOT is a complete plan that defines weaknesses in any organization. Therefore, considering weaknesses, dynamic approaches required to enterprises for improvements.
Characterize any business and timely decision – SWOT gracefully covers all aspects of businesses. With a detailed analysis, it helps in making a timely decision.
The seriousness of a potential threat- SWOT matrix can typically identify credibility and the seriousness of any threat. Other than that, SWOT also gives probability values for threats.
Any business can achieve the set goals Goals over a period of time- SWOT gives a roadmap for enterprises. Hence, any new policy and objective can be decided with the SWOT model.
Identify the obstacles- There are multiple factors that can create hurdles for a company. These obstacles are not easier to identify. With SWOT, an enterprise can clearly find unidentified difficulties.
Helps in reviewing strategy – SWOT is a type of structured process that can help in reviewing strategies. Apply these tactics in order to gain long-term results. Moreover, with SWOT analysis, enterprises can find our more valuable and workable opportunities.
Movement in the right direction– The statistical results generated with SWOT is enough to make a decisive decision. With results, enterprises can choose result-oriented feasible processes. Any business can avoid the inappropriate approach with the SWOT model.
SWOT Analysis Examples
First of all, for a better understanding of the readers, we have conducted a SWOT analysis of famous brands. Finally, here is the list of some brands with SWOT analysis.
SWOT of Adidas
SWOT of Amazon
Wise SWOT Analysis Template
For the convenience of the viewers, we have designed a SWOT template. There are multiple advantages that you can find from the (to be provided on contact). Hence, Enterprises just have to fill in the data. With the excel format given, it is a lot easier for an enterprise to enter the statistics available. Furthermore, add all the strengths, weaknesses, opportunities and threats in the template to get a complete analysis report.
What Role can SWOT Play in Making a Profitable Business?
Strengths- SWOT provides assistance in getting a confident approach. Therefore, with such an approach, any business owner can find out strengths to carry on with motivation.
Weaknesses- First of all, SWOT is a perfect description of finding the weaknesses in any setup. Furthermore, you can convert these weaknesses into strengths with the same approach.
Opportunities– To get opportunities, SWOT is the best possible option because it defines general criteria for finding an opportunity at every level of the business.
Threats- For a company certainly, a threat can be anything. Also, it can be a cause that can damage any enterprise. With SWOT analysis, consequently, you can evaluate and design the proposals. Therefore, proposals can express a number of ways of dealing with threats.
Summary:
SWOT analysis is a source of finding volumes of information about enterprise in various circumstances. One of the benefits of SWOT analysis is that it can simply identify the dynamics of any business enterprise.