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SWOT analysis: what it is, what it is for, how to apply it and an example

Swot analysis: what it is, what it is for, how to apply it and an exampleThere are few instruments that are as effective in increasing the competitiveness of a company the SWOT (Analysis SWOT).

If you do not know it, or you have already heard about it once, but you do not know how to apply it, it is time for you to master that topic.

It is also called the SWOT Matrix (SWOT) and its use is not complicated at all.

And even better: By having your SWOT Analysis (SWOT) ready, you have a powerful tool to evaluate your strategies and project a future with better results.

If that’s what you need, this article will serve as a guide.

We are going to explain what SWOT Analysis (SWOT) is, how to do it easily, what are its advantages and relevant points.

And you will see in practice, everything that this valuable instrument represents for an entrepreneur.

Go?

What is SWOT Analysis (SWOT)?What is Swot analysisSWOT Analysis (SWOT) is a management tool that evaluates the degree of competitiveness of a company in relation to the competition in the market.

In Spanish, it is known as the SWOT Matrix, which corresponds to the initials of strengths, opportunities, weaknesses and threats. It is precisely these characteristics that the matrix is ​​responsible for carefully analyzing.

In certain Latin American countries, it is also called SWOT – Weaknesses, Opportunities, Strengths and Threats and in Brazil, FOFA.

In any case, it is the ideal instrument to develop or adapt business strategic planning.

Few are the tools of easy application. In addition, it is effective to guarantee the criteria when making decisions,   so important in the administration of a business.

But to obtain better results, it is essential that the entrepreneur has knowledge about the market in which it operates.

And that includes customers, competitors, suppliers, and, mainly, the company itself, what it offers and how it does it.

What is it for?What is it for Whenever you have to decide essential matters for the future of the company, it is vital that you have all the necessary elements so that the decision is the best possible. True?

It is to give you such valuable information that SWOT Analysis is useful.

But how?

The matrix makes an analysis of the positive and negative points of the business and how these are related to the competition around you.

An interesting aspect of SWOT Analysis is that it is applied in a simple and practical way in all the scenarios that you can imagine within the business environment.

Let’s suppose, for example, that you want to launch a new product, and for that, you plan Digital Marketing campaigns through email Marketing, a beautiful landing page and some other resources.

What are the strengths that can be leveraged in that launch? What are the weaknesses that make your strategy more vulnerable?

In what way does this launch appear as an opportunity to gain space over the competition?

What is the risk that you will be surprised by the competitors, perhaps with an even better product and that you will conquer the market leadership?

You can see from the example that SWOT Analysis is intended to think about the company.

And when the manager sets out to reflect on the business, he is acting like a true entrepreneur in the search for practicable solutions.

Features of SWOT Analysis (SWOT)SWOT Analysis FeaturesYou will now understand what each letter that gives rise to the name of the SWOT Matrix encompasses.

Forces (Strengths)Force

To identify his strengths, the entrepreneur must reflect on the firm and solid points of the business. That is, what is presented as a competitive advantage?

It can be the price, the quality of your products or services, the quality of the service, the value you add to customers, among others.

Important: this is not a projection analysis. This means that it is necessary to evaluate the present moment and not the future.

Weaknesses (Weakness)

When observing and studying your current reality, it is necessary to identify everything that puts you at a disadvantage, and that consequently, can cause loss of sales and customers. Even generating higher expenses for you.

Contrary to the previous step, the answer at this point should indicate your disadvantages in relation to the competition.

You must take into consideration the aspects in which you lagged behind others.

Opportunities (Opportunities)Opportunities

When it comes to analyzing opportunities, it is going to be necessary for you to look to the future.

Like any good manager, it is important that you have goals set and described in minute detail.

So now it is worth answering:

Where do the goals go?

What are the spaces that the market offers and that you can also take advantage of them?

Either innovating or proposing something better than what your competition currently does.

Threats (Threats)Threats

Again with a view to the future, it is time to evaluate among your vulnerabilities, which of them can be used by the competition, to such an extent that they affect your results in terms of performance and income.

Will the competition come up with a newer idea than yours?

Is that idea going to better serve the public and surpass you in terms of quality?

This projection is the one that allows us to foresee risk scenarios and prepare to conquer the market with more security.

Who should do a SWOT (Analysis SWOT)?Who should do a SWOT Analysis

If you already understood the reasons why you have to do a SWOT Analysis, now you are clear that it is a methodology that should be practiced in any type of company, in the most varied situations.

But will it be necessary to invest in an external consultancy, a marketing professional, or a market research company to do this?

There is that possibility, but nothing prevents the entrepreneur himself from conducting the analysis process.

As I told you before, that task is quite simple, intuitive and easy to apply.

All options are valid, but it is essential that the manager monitors or directs the process.

And to qualify even more, how about having the support of everyone on your team to help identify your weaknesses, in the present and in the future?

The profit from that action will be double.

In the first place, the approach tends to be much more complete, the result of different views on internal processes and external influences.

Second, involvement and motivation are benefits to the work environment that cannot be wasted at any point.

If it is true that this makes the team more productive, why not give it a try?

How to analyze internal factorsHow to analyze internal factors

For the SWOT Analysis (SWOT) to have a better chance of working properly, with effective solutions to improve the company, it is necessary to see inward with the eyes of someone who observes from the outside.

It is not easy, but the effort is worth it.

In addition, to have a real external vision, even if you do not assign that mission to third parties, you will be able to count on the opinion of customers.

How about doing a survey with them?

An online form, super easy to develop, can work very well for you and get the answers you want with it.

I only recommend that you do not make the mistake of underestimating or overestimating your strengths and weaknesses.

Be honest with yourself.

A good way to start is to establish a parameter, that is, from your own competition and the market average.

In what ways are you better than the others and in what respects are you still below?

Considering the most important attributes for the activity of your company, in which aspects do you stand out positively or negatively?

And in the projections regarding the future of the business, in which areas do you need to improve and which sides can you use to favor your performance?

Questions and more questions.

SWOT Analysis (Sot) requires practically an in-house dive.

How to analyze external factors

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Who is your competition?

That’s a good question to begin evaluating external factors within a strategy built from the SWOT (Analysis SWOT).

The answer seems simple, because then you think about those who compete with you in the market.

But what market? Who is your target audience? What are your needs? Your interests and consumer desires?

By precisely delineating the competition and observing its practices, you form a broad vision about the blank spaces that you should take advantage of (the opportunities). As well as the issues that can reduce your number of clients and increase your costs (threats).

In any case, no matter how small the influence your company has, it is important that you understand that you cannot ignore the results.

It is true that, to some extent, you lose control of some things that are not within your reach, but minimally, your commitment is to prepare yourself as best as possible.

Write down the following: There is no external factor that does not require your intervention.

Example of a SWOT (SWOT)

Swot analysis example

Are we going to go to practice?

The problem is this: Your market share is low.

Your market share is 20% and you have only two strong competitors.

The solution is to increase the number of customers. But how to achieve this increase?

Forces

  • You care a lot about quality and avoid mistakes, which surely interests the customer, as they perceive it as a value.
  • You have experience and time in the market.
  • The image of your company is positive.
  • You tend to interact well with your audience and interact regularly on social media.

Weaknesses

  • The team does not show to be involved or motivated
  • There is still time to train it based on the sales destined for each type of client.
  • Loyalty is not your client’s strong suit.
  • Your price is not attractive.

Opportunities

  • Plan the automation of tasks to optimize time in the company.
  • Create a blog, because through this means leads are generated.
  • The economic scenario of the country improves.
  • The marketing investments by competition come down in recent months.

Threats

  • Possibility of new players entering the market.
  • Your ideas are not novel enough and can be easily copied.
  • Consumers increasingly concerned about the price.
  • In the long term, constant changes in team members negatively affect the process.

Now that you have completed the assessment of the internal and external factors of the company, it is worth asking: what is the next step?

This is a question that we will answer in the next topic.

How to transform the Matrix SWOT (SWOT) in actions and strategies?

How to transform the SWOT Matrix into actions and strategies

In the previous phase, you dedicated yourself to thinking about the company.

You identified a problem, defined a goal and put on a sheet of paper, everything that today has prevented you from achieving better results.

As we will see now, you have to establish relationships between the points you identified.

It is necessary to leave the field of theory and propose practical actions that effectively contribute to finding solutions.

You must individually evaluate each aspect exposed.

If it is positive, you must define what can be done to qualify it to the point of being perceived as a value, as an advantage from the customer’s point of view.

If it is negative, find a way to combat it, reduce it or correct it.

The secret basically lies in using your strengths to guarantee opportunities and curb threats.

On the other hand, don’t let weaknesses affect your planning for growth and development.

And also, ensure that these do not serve as a backup for the threats to be confirmed.

Let’s understand better, taking up the example we saw earlier.

Forces + Opportunities

Your analysis clearly showed that growth goes the way of your digital strategy.

While the competition reduces investment in marketing, you gain strength in social networks, you plan a blog, actions that favor a positive vision of the company.

On the other hand, the support of technology and the automation of tasks will allow you to have more time to execute a job with excellence.

Forces + Threats

Your strengths are capable of facing threats.

Even if new competitors appear in the market, your experience and positive image are triumphs that serve to preserve your position and go further.

On the other hand, even when the consumer has a significant price differential, you can use your marketing strategy to win him over and show him that to receive a quality product or service, it does not have to be expensive.

You must add benefits.

Weaknesses + Opportunities

Opportunities

With automation, you have the perfect opportunity to guarantee precious time to train your team and increase their level of involvement.

And as an extra improvement, you will achieve the motivation of the collaborators, which will lead to greater productivity.

Another point that you should take into account is that, although the current price is not attractive, a preview of what the economic scenario shows, could create the ideal conditions to change that reality.

Weaknesses + Threats

When weaknesses and threats come together, there is only one way: decrease the possible negative impacts to reach your goal.

For example, you know that your price is not attractive and this is an aspect that consumers value more and more.

It is clear then, that this is a key point that must be attacked for your strategy to be successful. Do you agree?

In this case, the SWOT Analysis (SWOT) will conclude when you establish cost reduction actions that allow you to offer the client more attractive values.

If that happens, who knows the price is the primary factor to fulfill another missing stage: that of customer loyalty. Do not you believe it?

Another aspect that deserves your attention is related to the team. Lack of motivation and time to mount a good sales training.

Added to this is the fact that there have been many changes in employees, perhaps overcome by disinterest and apathy.

Is that not a clear sign that you are paying little attention to them?

Your planning is almost complete. And there is a lot of work ahead.

But how good that it is. Without the SWOT analysis (SWOT) probably you would not have discovered aspects as important.

Conclusion

Conclution

SWOT Analysis (SWOT) is one of the most complete management tools for the study of the scenario and strategic planning that seeks greater competitiveness.

It is not a complicated instrument, on the contrary.

As we saw throughout the article, for it to work properly, you are the key piece.

Reflect on your company, look for the essence of what you offer and how you offer it.

Use your analytical and critical senses, as these are the ones that will lead you to the answers you are looking for.

And no matter what is your need, SWOT (Analysis SWOT) is democratic and secure will be able to help.

If you liked this article, be sure to expand your knowledge, investigate more about this and other tools to support the manager.

But above all, apply the theory in practice. Encourage your team to contribute and get closer to your customers every time.

All kinds of evaluation are valid for your consolidation and growth.

Do not miss the opportunity to improve and grow.