SWOT analysis: what it is and how to apply it in your company

The SWOT analysis is a technique used to carry out evaluations of internal and external aspects. The result of this evaluation will help us to design effective strategies in the undertaking of a new project or business.

Read on to learn more about the SWOT Analysis and why it can help your business. In addition, we will leave you some suggestions so that you can make yours effectively!

What is the SWOT analysis?

The SWOT analysis is used to identify the strengths, opportunities, weaknesses, and threats of a given business or project. In this way, effective strategies and actions can be established for the development of the project.

This technique can be used both in professional and personal fields, since it helps to have greater visibility of competitive opportunities for improvement and of possible internal and external obstacles that may arise in the future.

The SWOT acronym, also known as SWOT, is made up of the words strengths, opportunities, weaknesses and threats. Let's see what each of these elements deals with in the business context:

Strengths:

These are the internal initiatives that work well within your company. By analyzing this aspect, you can replicate the strengths of a certain area to improve another.

To identify the strengths of your company, you can use the following questions:

●      What do we do well?

●      Why are we special?

●      What does the target audience like about our company?

An example of strength can be: excellent customer service available 24 hours a day or a variety of products.

Opportunities:

It is about the good opportunities that the company has and that can bring benefits within the market. They can be weaknesses that you would like to improve and internal factors that can help your company achieve its objectives.

Some questions you can use to help you visualize opportunities are:

●      What are our goals for this year?

●      What can we do to improve the areas in which we have weaknesses?

●      What external factors can I take advantage of in my sector?

For example, the increase in digitization in your sector can be a great opportunity to be taken advantage of.

Weaknesses:

It refers to initiatives within your company that are not working as expected. Weaknesses represent a disadvantage against your competitors, but the good thing is that, by identifying them, you will know exactly what points you need to improve in your projects.

As a guide, you can ask yourself the following questions to discover what are the weaknesses of your company or project:

●      What initiatives are not working well and why?

●      What could we improve?

●      What resources could help improve our performance?

Some examples of weaknesses for companies can be high fixed costs or limited budgets.

Threats:

They are the problems, challenges or difficulties that your company may face. The difference between weaknesses and threats is that the former depend on the company, while the latter are external factors that are normally beyond our control.

The questions that can help you find the threats are:

●      What are the new trends that are coming in the market?

●      What changes in the sector concern us?

●      In what areas or aspects are we surpassed by our competitors?

A good example of a threat was the arrival of the pandemic, or changes in market prices.

Why is it important to perform this type of analysis?

The SWOT analysis allows you to have a broader vision of both the positive and negative factors of your company and sector. Thanks to that, you will be able to identify the elements that have the most impact on your business.

In addition, the SWOT stands out for helping to detect internal and external obstacles that could arise and, with that, you can draw up an effective strategy and plan to overcome them and achieve your goals.

This type of diagnosis can also increase the performance of your employees, since they end up focusing on their strengths and even strive to obtain better results.

Tips for doing a SWOT analysis

1. Find a space to draw your diagram.

It can be on a blackboard, piece of paper, or even on collaborative platforms or websites like Miro. Draw a cross that divides the space into four, in each of the quadrants you will write the words Strengths, Opportunities, Weaknesses and Threats.

2. Contextualizes the situation or improvement project.

Explain what the goal of the project is, how long it will take to achieve it, if there is any precedent or if it is something new, who are the participants in the project, among other information that may be useful to start the exercise.

3. Start with a brainstorm.

You can do it alone, but it will be much more effective if you bring your team together because more ideas will come out.

4. Establish the rules of the exercise.

You can establish the ones that seem most relevant to you, for example: be realistic in the ideas that arise, look at the situation from different perspectives, be objective, and set a time for the discussion session or sessions in order to maintain the fluidity of the process.

5. Gather the information in pairs.

It is advisable to first collect the information for the Strengths and Opportunities and then the Weaknesses and Threats. Once you have information for each category, you can start the discussion to explain and argue each point if the SWOT analysis is done as a team.

6. Put your SWOT analysis to rest.

When you're done with your analysis, let your thoughts rest, and after a couple of days, review it again to see it from another perspective. You can review, modify and expand your analysis as much as you see fit.

7. Create a strategy from the information.

Once your analysis is complete, you and your team will be able to discuss the actions to be taken for the proper development of the project. An extra tip is to identify actions that can be measured in order to calculate the effectiveness of progress in your efforts.