Usage of SWOT analysis
You usually do the SWOT analysis every year as part of your normal business process, but you can also help start-ups.
What is a SWOT analysis?
A SWOT is an element of corporate strategy creation that you usually formulate as part of your business plan.
Of course, you can create it not only for the whole business, but also for a 1-1 project or even for a person (e.g. before selecting a key person).
Meaning of the SWOT
It consists of the acronym SWOT and covers the initials of the following 4 words:
- S: Stengths
- W: Weaknesses
- O: Opportunities
- T: Threats
When you do the SWOT analysis, you focus on these 4 areas, that is, you go through the strengths and weaknesses of your business, and then look at what opportunities you have and what dangers lurk in front of you.
You can use the SWOT matrix to facilitate this.
The SWOT matrix
When you do the analysis, you go through the matrix below.
Advangages of SWOT
When you do the analysis, you get a relatively simple, transparent picture of where you are right now. It has a maximum size of 1-2 pages, typically fits on 1 A4 page, precisely for clarity.
Keep in mind that this is a summary, if necessary and justified, you can use any number of pages for background calculations, but only the final result will be included in the analysis.
Because it is clear, you can see the big picture, which is much easier to break down into building blocks later. This will help you take your business in a way that is beneficial and right for you.
Disadvantages of SWOT
There is no perfect system, so don’t expect it to solve everything in one step. The SWOT analysis focuses specifically on internal factors, even if you include opportunities and threats. After all, something could mean you opportunity or threat because of your current state
Accordingly, expect the external image, i.e. an objective view, from the PEST analysis. This is because SWOT will not place you in the current market-political and other environment.
Making the SWOT analysis
Formulation of questions (and answers)
The matrix above contains only example questions, which may be different in your business. The point is, in each of the four sections, formulate the questions that apply to your business.
Since the next step is to draw conclusions, do so profound.
You can’t draw a conclusion based on questions alone, and even if you’ve dealt with the strength so much that “we’re market leaders”. Support it with numbers and data so that only questions and statements that you can build on are included in the analysis.
Formulation of a conclusion and an action plan
A properly prepared SWOT analysis will give you an easy-to-see picture of where you are now and what options you can use in the light of your resources. When formulating an action plan, include several things, such as:
- making more effective use of strengths
- reducing weaknesses
- “channeling” opportunities in view of resources (money, time)
- addressing hazards where possible
The business plan already mentioned that you don’t prepare it once, but several years in advance each year. That is why they will also show overlaps. The final step in the SWOT is to check the plan that has already been implemented, to see if the planning was correct. If so, you move on, if not, you correct and replan.
Possibility of error when preparing the SWOT analysis
If you get lost in the details, you have to write a completely unnecessary summary. If the summary also needs a summary, it will be impossible to follow your logic. Strive to include only the most important points in the analysis, those that are important to move forward.
Rough (not detailed at all)
If you don’t understand how to make it, or maybe it’s all just a pain in your neck, you’re working with a “just write something” attitude. This is just a small mistake while preparing for an exam, but here your livelihood is at stake.
If you don’t understand, ask (even here) if you feel overwhelming, organize it. Both are a much better solution than leaning back in the belief that everything is fine and then the whole thing suddenly falls on your head. (In many cases, the unexpected would have been foreseeable if you had acted with due diligence.)
Fairy Tale 1.0
If the whole SWOT analysis is out of the air and has about as much to do with reality as an average tale, it doesn’t matter at all how much energy you put into it or just how elaborate it is. Before you make a decision on how to proceed in part as a result of this analysis, you can also support it with numbers.
Example of SWOT analysis
Home delivery has become more valuable these days, so in the example below you can see a SWOT analysis of an imaginary parcel delivery company to make it easier for you to make your own.
- Do you do a SWOT analysis and if so, to what extent?
- In what cases do you see the benefits of such an analysis, and when would you choose something else?
- How do you monitor whether the analysis you have made is realistic?
You can contact us here with your questions. Write down your question and we’ll see how we can help you effectively.