SWOT Analysis – An Overview

Have you been asked to conduct a SWOT analysis for your business assignment but don’t know where to start? With a SWOT analysis, you should be able to uncover any hidden weaknesses or challenges affecting a business’s growth. If you are wondering what a SWOT analysis of a business is, this blog is for you. Here we will discuss: 

• SWOT analysis meaning
• SWOT analysis definition
• How to do SWOT analysis of a company 
• And more

What is SWOT Analysis?

SWOT analysis is a technique or framework by which you can get an overview of a business or company’s SWOT (Strengths, Weaknesses, Opportunities and Threats). By understanding these critically important sides of a business, you will how competitive the firm is and use those insights to shape its strategies for future growth. 

What is the Importance of Conducting a SWOT Analysis of a Business?

Every business that wants to survive in the long run or scale to new dimensions needs to do a SWOT analysis from time to time. Its importance is discussed below.

To know about newer opportunities:

 One of the basic purposes of doing a SWOT analysis is to discover the hidden opportunities. The ‘O’ in SWOT represents the opportunities in SWOT analysis. 

To formulate growth strategies:

The importance of SWOT analysis in strategic management is invaluable. To formulate effective and lasting strategies, one must learn how to do a SWOT analysis properly first. 

To conduct efficient project management:

Just how accurately and futuristically a business can work towards its strategies, so can SWOT analysis in project management help. It helps them know in advance about the project’s strengths, weaknesses, opportunities and threats.

To amplify marketing goals

Companies can create a SWOT analysis chart to show their marketing objectives and mark where they currently stand.  Most of the successful companies use SWOT analysis marketing these days. 

Taking a Closer Look at the Components of SWOT Analysis

To understand the SWOT process better, you need to understand its components. These components are directly represented in the full form of SWOT analysis – Strengths, Weaknesses, Opportunities and Threats. 

Strengths:

Strengths stand for those inside resources and exclusive qualities that could position a business on a safe front or a competitive edge. Some of the strength analysis examples include the business’s current industry lead, brand identity, financial stability, or even innovative capabilities.

Weaknesses:

Just like strengths, weaknesses too are internal in nature. They are blockages that can effectively stop a business’s natural growth.  SWOT weakness examples include outdated technology, inefficient practices, skill gaps, and poor financial management. When these weaknesses remain hidden, they can hinder growth.

Opportunities:

Unlike the initially discussed two elements, opportunities are external in nature. A business must be proactive in identifying them. Once they spot any good opportunities on SWOT analysis like favourable market trends, policy changes, and technological advancements, they should be quick to capitalize on them.

Threats:

Threats are outside challenges that a business is likely to face which has the potential to slow down or destroy the business altogether. Some SWOT threats examples are increasing competition, economic downturns, and changes in government regulations or customer preferences. When these happen unexpectedly, a business has no other way but to face it.

What is Meant by a SWOT Table?

A SWOT table is nothing but a visual representation of the data from the analysis put in tabular form for quicker understanding. Each component of the analysis – Strength, Weakness, Opportunity and Threat – is logically tabled for it. Just like SWOT tables, you can also find SWOT chart examples and SWOT diagram examples popularly being used. 

How To Conduct a Swot Analysis- An Overview

If you ask us how to make a swot analysis, the answer is there are plenty of ways to do it. However, when you go with a more structured approach, your chances of realizing the intended goals are high. Here we have worked out a proper structure to help you how to perform a swot analysis. 

Identify your Goals:

One need not wait for a particular time to do a swot analysis of any company. However, when you do it in the context of an upcoming event or a policy change, it is easier to define your goals and therefore narrow down your approach for more targeted findings. For instance, if you are conducting a SWOT analysis in the wake of a government ban on plastic bags, you can focus on identifying new eco-friendly alternatives (opportunity). 

Collect Relevant Data:

For a successful SWOT analysis, you need to go through a series of relevant data sets. Collect all the facts and figures you can have from different sources. Approach the right people for the right information. For instance, some of your stakeholders or employees may have familiarity with external factors like threats and opportunities while others may have more insights to share on internal things like strengths and weaknesses. 

Write Down Your Insights:

After the completion of the comprehensive analysis, each SWOT category needs to be systematically filled out for a clear direction on what to do next as in: 

Internal Factors

Strengths:

• What are our key advantages?
• What assets set us apart?

Weaknesses:

• Where do we need improvement?
• What products are underperforming?

External Factors

Opportunities:

• Are there emerging market trends?
• What untapped customer segments exist?

Threats:

• How competitive is the industry?
• Are new regulations affecting operations?

Organize and Prioritize Your List:

 Considering the broad nature of the SWOT analysis, you may have quite a huge list of findings across all four components. You need not take further action on each since that will leave the process more complicated and less targeted. Instead, you may organize your list of findings in order from best to worst and give priority to a few most important ones. 

Formulate an Action Strategy:

Based on the final list you have made on the priority scale, create an action strategy.  For instance, if your goal is to enter a new market and the SWOT analysis reveals strong competition and regulatory challenges, you may choose a different line of approach before proceeding to the new market entry. Say adjusting pricing strategy and thereby strengthening position in the market. 

Common Mistakes That Can Weaken Your SWOT Analysis

Your SWOT can be an effective strategic tool, but if it is done without addressing the following mistakes, it can turn out to be misleading and ineffective.

Lack of Objectivity:

In the absence of objectivity, you may run into overestimating strengths and ruling out key weaknesses which results in an unrealistic analysis. What you can do here is review at least one SWOT analysis of a company example and define your objectives first. 

Limited Perspectives:

If you conduct your SWOT analysis in isolation without gathering input from stakeholders or inspecting relevant business plan swot analysis examples, you will end up getting an incomplete and biased assessment of your company’s actual position in the market. 

Failure to Prioritize:

Treating all SWOT factors with equal consideration can lead to drawbacks like resource misallocation and poor decision-making in the line. This happens because you are overlooking the most critical elements in your analysis.

One-Time Analysis:

Considering SWOT as a single exercise will leave you ignorant about most of the market changes taking place. As a result, the strategies and action plan you take continue to remain outdated and inactive. Any key strategy being formulated needs to be based on a recent SWOT analysis. 

Advantages and Disadvantages of SWOT Analysis

While SWOT analysis is widely popular among businesses, it is important to note that it is not fully loaded with advantages alone. There are some disadvantages or drawbacks too. Let’s take a look at four mostly reported advantages and disadvantages. 

Advantages

Disadvantages:

How to Do a Great SWOT Analysis – Tips from Experts

Depending on factors like when you do, what industry the business is in and several other factors, the success of conducting a SWOT analysis can vary. However, keeping the following tips, which our experts have compiled, will help you minimize the chances of failure.

Know your goal:

Focus your SWOT on a single specific thing which you wish to accomplish at a business at a time. Having multiple goals will dilute the prioritization. 

Don’t follow assumptions:

Never rely on assumptions for your SWOT analysis. Always go with actual metrics. 

Involve all stakeholders:

Have all your stakeholders – employees, partners, buyers, and other people in the know – have a say. 

Create plans that you can do:

Turn what you discovered in the SWOT analysis into plans that you can actually use.

Conduct SWOT periodically:

A single SWOT analysis, used for an extended period, can become ineffective. Conduct them periodically for the latest insights.

Want to Master SWOT Analysis and Achieve Top Grades?

Are you required to prepare to write a SWOT analysis assignment but worried about the complexities, lack of time and other challenges? Don’t worry. Anjit VS and Team can offer expert and personalized assistance for your assignment writing.

Conclusion

Congratulations on taking the time to learn how to conduct a SWOT analysis! 

Did this blog help you understand the SWOT process better and have you started applying the insights to your assignment? 

Your input is important to us. So, feel free to share them in the comments. 

FAQ

Can you list the four examples of threats in SWOT analysis?

The four common examples of threats discovered in SWOT analysis are market competition, regulation changes, supply chain disruptions and economic downturns. 

Who is behind the invention of SWOT Analysis?

SWOT analysis was invented by Albert Humphrey at the Stanford Research Institute in the year 1960. He came up with this approach when he was researching how to help organizations improve their strategic planning and decision-making.

How does SWOT Analysis differ from TOWS Matrix?

While SWOT identifies strengths, weaknesses, opportunities, and threats, TOW’s focus is on formulating strategies by carefully matching internal strengths/weaknesses with external opportunities/threats. 

How can I write an impactful SWOT analysis?

To write an impactful SWOT analysis, you first need to define the objectives followed by gathering relevant data from all stakeholders. After that, organize and prioritize findings and develop doable strategies.