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What is a SWOT Analysis – SWOT Analysis Guide (With Examples)

SWOT analysis is important because it provides an opportunity to understand what your strengths are and what needs improvement.

What is a SWOT Analysis?

A SWOT analysis is an evaluation of an organization’s strengths, weaknesses, opportunities, and threats.

The purpose of this type of analysis is to provide guidance on the types of decisions that need to be made for an organization.

It can be used as a strategic planning tool to help with setting goals and objectives.

The first step in setting up an organization’s SWOT is determining its strengths and weaknesses.

Strengths are important because they indicate what the company does well or has control over.

What is a SWOT Analysis?

Weaknesses, on the other hand, are things that pose obstacles or limitations for the company.

Opportunities are aspects of the business environment that can be utilized by the company to its benefit.

Threats are factors outside of the company that pose potential problems.

After setting up an organizational SWOT, setting goals can be done by setting objectives to address weaknesses or threats and improve upon opportunities.

Objectives should state what the organization will do to either resolve a weakness or take advantage of an opportunity.

If possible, objectives should be attainable given the strengths and capabilities of the organization.

Once objectives have been established, setting goals can be done by setting timelines to address each objective.

Goals are measurable milestones that help determine whether objectives are being met during a timeline.

It is important to set realistic goals based on the opportunities or threats resulting from the SWOT analysis.

If an objective cannot be resolved within a timeline, setting a new objective can be done by setting up a new timeline.

Another aspect of setting goals is to prioritize the objectives and goals in order to maximize the benefits from using limited resources.

It does not make sense to create or dedicate efforts towards an objective if it will not help meet other ones.

Objectives should also be prioritized based on the severity of their weaknesses or threats to the company.

The benefits of using SWOT analysis in decision making are threefold.

First, it brings awareness about problems and limitations within an organization.

Second, it provides guidance on how to improve upon aspects that are favorable for the business.

Lastly, SWOT helps identify opportunities that might not have been considered or identified.

Strengths

Strengths in a SWOT analysis can be either strengths of an organization or strengths of the environment.

Strengths of an organization may include high-quality product, loyal customers, and great service.

On the other hand, strengths in the environment may be economic incentives for investment, industrial development, and skilled labor. A company might not have control over these kinds of strengths but they can work on improving them.

Weaknesses

The weaknesses of an organization in a SWOT analysis are the limitations that pose obstacles for the company.

They may include poor communication, lack of market research, or not enough capital to invest in new equipment.

Weaknesses can vary depending on what type of business is being analyzed whether it be private, public, non-profit, sole proprietorship, or corporation.

Opportunities

Opportunities are aspects of the business environment that can be utilized by the company to its benefit.

They may include economic incentives for investment, skilled labor, and market growth due to trade agreements between countries.

While some opportunities may not be completely under control of the organization, they can influence them through decision making.

Previous research may also provide opportunities to an organization.

Threats

Threats are factors outside of the company that pose potential problems.

They may include lower levels of education, lack of infrastructure, and inefficient government bureaucracy.

Threats can vary depending on what type of business is being analyzed whether it be private, public, non-profit, sole proprietorship, or corporation.

Objectives

Objectives are what an organization sets up to accomplish within a certain timeframe.

The objectives may be set upon the SWOT analysis of strengths, weaknesses, opportunities or threats depending on what aspect of business is being analyzed.

Objectives are used to improve upon aspects favorable for the business while also resolving aspects that are unfavorable.

Objectives can be changed within a timeline in order to accommodate changes that might occur.

Objectives should be attainable based on the strengths and capabilities of the organization in order to maximize benefits gained from using limited resources.

Goals

Goals are measurable milestones that help determine whether objectives are being met during a timeline.

They can be used by setting timelines for each objective or making objectives with corresponding goals.

It is important to set realistic goals within the timeline in order to better measure whether objectives are being met.

Goals can also be detailed further into sub-goals which are smaller milestones that help reach the goal of the objective.

Why are SWOT analyses used?

SWOT analyses are used to evaluate aspects of businesses, which allow them to see things that they might not have previously.

It provides the business with an opportunity to understand what their strengths are and what needs improvement.

SWOT analyses can give a company guidance on how they can improve on their strengths or even exploit opportunities that may not have been considered.

What are the benefits of using SWOT Analysis in Decision Making?

  • Understand the needs of your company.
  • Identify strengths and weaknesses.
  • Create a plan for future success.
  • Take control of your business.
  • Build a strong team to work with you on this journey.
  • Keep your company competitive.

What are the risks of using SWOT Analysis in Decision Making?

  • Gaining too much information that isn’t relevant to making a decision.
  • Collecting irrelevant or bad data from your team.
  • Getting lost in all the data and not being able to make a decision on anything you’ve researched.

How would I use SWOT Analysis in Decision Making?

  1. Start by writing down your objective for the decision you are trying to make.
  2. Once you have that, begin listing out what your team sees as strengths and weaknesses for your company or organization.
  3. After you have done this step, list any opportunities or threats that may be relevant to your decision.
  4. Look at what strengths or opportunities you have, and use them to create a list of criteria for a plan on how you can accomplish this objective given the information collected from the SWOT analysis.
  5. Recommend a specific solution based on all of your research done in Steps 1-3.

SWOT Analysis for Organizations

SWOT analysis is often used in marketing strategy, where the company can list its strengths, weaknesses, opportunities and threats on post-it notes or cards.

They are then stuck on a wall so that it is easy to view the different aspects of the company at once.

SWOT analyses highlight both internal and external factors that affect the organization’s success.

The business can then use this information to determine the best course of action to take in order to maximize benefits and minimize weaknesses.

There are different types of SWOT analysis, but all involve creating a list that outlines the company’s strengths, weaknesses, opportunities, and threats.


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