As a manager, you always take critical decisions, they are supported by numbers and facts, still, you need a guide that makes you sure about them. Here comes the role of SWOT Analysis. A tool that illustrates the business elements and categorises them through success and failure factors. So, how can you get the most use of SWOT?
What does SWOT analysis mean?
It’s a method of analysis that could be used with a project, individuals, or even companies. For companies, it evaluates the pros and cons of the business through actual facts. It’s recommended first to determine the goals of the analysis before you start mentioning the strengths, weaknesses, opportunities, and threats.
The (Strengths) and (Weaknesses) are internal factors in the company, so they’re much easier to observe and enhance. They include resources, assets, talents, location, competitive advantages, and other factors.
The (Opportunities) and (Threats) are external factors, they need a thorough sight that scans all possible factors to support the company’s position in the market and factors that could threaten the existence of the company either through competition, economic crisis or others.
Importance of SWOT analysis
After being frank during the analysis, it’s time to take the next step, determining the needed strategic plan for the current stage to achieve the business goals. The company has enough insights to determine which factors directly affect its growth and achieving its goals. It’s now easy to determine which project should the company implement as a high priority.
When should your company need a SWOT analysis?
There are many standard cases that need to construct a SWOT analysis, to be a guide and a compass that orients the owner to the right direction, cases as
- Scanning the business performance to find out areas that need improvement.
- Looking for new opportunities the company can make use of.
- Launching a new product/service.
Forming a SWOT analysis matrix
It’s a matrix that consists of four quadrants, each quadrant represents a group of factors (Strengths, Weaknesses, Opportunities, and Threats), and the first row represents the internal factors, where Strengths and Weaknesses are put opposite to each other to be easily compared, similarly, the second row includes the external factors, where Opportunities and Threats are found next to each other.
Tips to construct a powerful SWOT Analysis
Brainstorm from different perspectives
Observing company elements from different perspectives gives a 360 overview at the end, this prevents the analysis from missing a thing. Determine the factors that could be crucial for all departments in the company and that could be important to some, not others.
Turn threats into opportunities to grow
It’s a difficult tip, however, every threat that you can see before it’s coming makes you ready to face it, so if it didn’t come, your company would be stronger, and if it came, the company would be waiting for it to face.
Start with external factors
Analysing from external to internal is better, as opportunities and weaknesses orient you towards the core weakness and strengths, and nurturing them will make you capture the opportunities and defeat the threats. This turns SWOT analysis into TOWS.
Don’t forget to prioritise
According to the goal determined, and arrange your factors from the most important to the least important in each quadrant, this will help you to put the strategy that includes your plan steps in a time schedule.
Mistakes that most of us make in constructing SWOT analysis
SWOT Matrix has easy steps to construct, however, it needs careful planning to make use of it and deliver effective results, therefore, there are many mistakes that we stumble over unintentionally which are:
Constructing long unrealistic matrices
As your lists become shorter and clearer, you will be more decisive and easily oriented towards actions that should be done. Make sure that every element of your matrix you can deal with as soon as possible without any factors of procrastination either they were internally or externally.
Not getting a complete overview of weaknesses
Putting a few numbers weaknesses doesn’t always mean that your business is in its best form, it might appear that you’re missing some traces. To have a full image, ask and gather information from employees, clients, and partners. Using surveys, polls, and feedback forms, you’ll get the useful information you need.
Depending on the SWOT Analysis solely
The SWOT Matrix could be a perfect basic method to analyse factors internally and externally, but relying on it alone could be misleading and make the overall image vague. Using other methods like SOAR, TOWS, or PEST in addition to SWOT always gives outstanding results.
SWOT analysis is essential for any fact-based decision and any situation that needs to be reviewed. Whitecollars uses different methods of analysis, including SWOT as an initial base, during evaluating your team’s performance. Check our HR solutions!
