SWOT analysis - Silvermoon

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.

STRENGHT	WEAKNESS
How are you better than your competitor? What resources do you have that you can build on? How do people benefit from working with you? What makes you unique compared to your competitors? What is your main strength?	In what and how can you improve? How are the others better than you? What are the possibilities to be more efficient? Are your resources sufficient? What is your main weakness?
OPPORTUNITIES	DANGERS
What are the market trends? Who are the groups who can be targeted? (in addition to the existing target group) How can you increase customer engagement? How can you even out or increase the demand for your product? Can you (and if so, how) expand your business?	Is there seasonality / full off season? Who is serving your target group at a higher level? How do technological innovations affect your business? What external obstacles do you encounter? (Up to legal obstacles)

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.

How much do you know about businesses?

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

Implementation, follow-up

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

Too detailed

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.

STRENGTH	WEAKNESS
Brand:your customers / target audience easily recognizes and is already looking for Technology:our well-designed computer system, which also uses artificial intelligence, allows us to reduce errors and recommend another product that meets the customer’s interests Product range: the wide range of products available through us appeals to many people Finance:Not only has sales increased in recent years, but also profits Customer satisfaction:fast and accurate delivery	Low profit margin:although sales increase, not fast enough due to low profit margin Warehouse scarcity:we try to deliver the product directly from the producer to the customer’s house, but if a pick-up point is chosen, the opportunity is scarce, which hinders growth Sustainability:the increasing number of returns represents a significant environmental burden Human errors:although a computer system takes a significant burden off a person’s shoulders, inadequately trained workers can cause harm against their will.
OPPORTUNITIES	DANGERS
Opening new markets:e.g. mediation of services Going abroad:building an international opportunity like Amazon or Ali baba Cooperation with warehouses:expansion of collection points Local cooperation with subcontractors and smaller courier companies:to solve temporary capacity shortages Branded products:from the most popular product range to a product range with constant quality and stock, so the buyer does not buy a “lucky bag”	Competitors:: whether other smaller suppliers, but whether the expansion of Ali baba or Amazon is a serious challenge Factors Affecting Financial Stability:Decreasing profit margins on physical products Legislation:: tax changes, road use options, or other changes that also affect shipping / warehousing Difficulty going abroad:the potential partner network there is already cooperating with others, but the target audience does not know our brand there

Questions:

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.