SWOT Analysis: What is it and how is it done? Everything you need to know
Posted: Tue Jan 21, 2025 12:08 pm
Strategic planning is a fundamental part of any company. Constant internal and external evaluation allows organizations to have a clear picture of what is happening inside them, with the aim of how overseas chinese contribute to business in the usa identifying aspects that enhance the development of their businesses, products or services.
Through strategic planning, companies gain a clearer vision of the actions that must be implemented to achieve their business vision and mission objectives. Strategic planning processes seek to make companies more competitive, achieving growth, evolution and sustainability over time.
One of the most effective and widely used tools in companies' strategic planning processes is the SWOT analysis , which allows us to understand the context of an organization from different perspectives.
If you are interested in learning more about how SWOT analysis supports companies' planning processes, keep reading this article, where you can learn what SWOT analysis is , what it is used for, how to implement it, examples and, most importantly, where you can learn and master this tool.
What is SWOT analysis?
First of all, it is important to understand what the acronym SWOT refers to . It stands for Strengths , Weaknesses , Opportunities and Threats . In English it is known as the SWOT method (Strengths, Weaknesses, Opportunities and Threats ) .
The SWOT analysis , also called the SWOT matrix , is a tool whose purpose is to provide an overview that allows understanding and comprehending the current context of a company or business, by identifying and analyzing strengths, opportunities, weaknesses and threats.
Based on the diagnosis provided by the SWOT analysis , companies can make decisions based on their situation and needs, in order to improve their presence and impact in the market and with their consumers.
The SWOT analysis or DOFA matrix was designed by Marion Dosher, Dr. Otis Benepe, Albert Humphrey, Robert Stewart and Birger Lie, a group of consultants appointed by the Stanford University Research Institute between 1960 and 1970, to determine the reasons why a company's planning failed at the management level. Today, its popularity has allowed it to be introduced into other areas such as marketing and even into personal dimensions as a tool for self-assessment.
As we mentioned in previous lines, the SWOT analysis is divided into four quadrants that allow us to evaluate the internal and external factors that can influence the development and growth of an organization.
Internal analysis:
Strengths refer to those capabilities and resources that a company has and that can determine its level of competitiveness, as well as the possibility of defining advantages that allow it to achieve a better position in the market.
Weaknesses encompass all the circumstances and aspects that can create or put a company in a position of competitive disadvantage compared to other companies. They show the limitations in the capabilities for the development of strategic planning.
External analysis:
Opportunities aim to identify the characteristics and factors that allow a company to remain current in the market.
Threats are aspects that can put organizations at risk. Their identification through SWOT analysis allows for the prevention and/or avoidance of complex situations and even the transformation of them into new opportunities.
What is the use of SWOT analysis for companies?
The strategic planning of a company is highly benefited by the implementation of the SWOT analysis tool , as it allows observing, understanding and analyzing the environment of a company from a global perspective, thus establishing an accurate and valuable diagnosis where advantages, internal and external difficulties and opportunities to enhance and give a business a greater and better reputation are identified.
Features of SWOT analysis
There are three additional or secondary characteristics that complement the importance and usefulness of the SWOT analysis in companies.
Initiative: focuses on the premise that the SWOT analysis does not determine a conclusive result, that is, the tool does not have “the last word” with respect to the alternatives for a company; on the contrary, it provides information that promotes the creation and development of strategies with participation and team decisions.
Subjectivity: This characteristic establishes that the SWOT analysis is not an objective tool; on the contrary, when implemented and developed by people, the key aspects for the evolution and growth of a company are determined from their vision.
Temporality: the validity of the SWOT analysis is temporary, meaning that it represents a specific and determined moment in a company's life. It is necessary to develop the analysis frequently, since the context tends to change, as do consumer behavior, technologies, and economic, political, and social scenarios.
Through strategic planning, companies gain a clearer vision of the actions that must be implemented to achieve their business vision and mission objectives. Strategic planning processes seek to make companies more competitive, achieving growth, evolution and sustainability over time.
One of the most effective and widely used tools in companies' strategic planning processes is the SWOT analysis , which allows us to understand the context of an organization from different perspectives.
If you are interested in learning more about how SWOT analysis supports companies' planning processes, keep reading this article, where you can learn what SWOT analysis is , what it is used for, how to implement it, examples and, most importantly, where you can learn and master this tool.
What is SWOT analysis?
First of all, it is important to understand what the acronym SWOT refers to . It stands for Strengths , Weaknesses , Opportunities and Threats . In English it is known as the SWOT method (Strengths, Weaknesses, Opportunities and Threats ) .
The SWOT analysis , also called the SWOT matrix , is a tool whose purpose is to provide an overview that allows understanding and comprehending the current context of a company or business, by identifying and analyzing strengths, opportunities, weaknesses and threats.
Based on the diagnosis provided by the SWOT analysis , companies can make decisions based on their situation and needs, in order to improve their presence and impact in the market and with their consumers.
The SWOT analysis or DOFA matrix was designed by Marion Dosher, Dr. Otis Benepe, Albert Humphrey, Robert Stewart and Birger Lie, a group of consultants appointed by the Stanford University Research Institute between 1960 and 1970, to determine the reasons why a company's planning failed at the management level. Today, its popularity has allowed it to be introduced into other areas such as marketing and even into personal dimensions as a tool for self-assessment.
As we mentioned in previous lines, the SWOT analysis is divided into four quadrants that allow us to evaluate the internal and external factors that can influence the development and growth of an organization.
Internal analysis:
Strengths refer to those capabilities and resources that a company has and that can determine its level of competitiveness, as well as the possibility of defining advantages that allow it to achieve a better position in the market.
Weaknesses encompass all the circumstances and aspects that can create or put a company in a position of competitive disadvantage compared to other companies. They show the limitations in the capabilities for the development of strategic planning.
External analysis:
Opportunities aim to identify the characteristics and factors that allow a company to remain current in the market.
Threats are aspects that can put organizations at risk. Their identification through SWOT analysis allows for the prevention and/or avoidance of complex situations and even the transformation of them into new opportunities.
What is the use of SWOT analysis for companies?
The strategic planning of a company is highly benefited by the implementation of the SWOT analysis tool , as it allows observing, understanding and analyzing the environment of a company from a global perspective, thus establishing an accurate and valuable diagnosis where advantages, internal and external difficulties and opportunities to enhance and give a business a greater and better reputation are identified.
Features of SWOT analysis
There are three additional or secondary characteristics that complement the importance and usefulness of the SWOT analysis in companies.
Initiative: focuses on the premise that the SWOT analysis does not determine a conclusive result, that is, the tool does not have “the last word” with respect to the alternatives for a company; on the contrary, it provides information that promotes the creation and development of strategies with participation and team decisions.
Subjectivity: This characteristic establishes that the SWOT analysis is not an objective tool; on the contrary, when implemented and developed by people, the key aspects for the evolution and growth of a company are determined from their vision.
Temporality: the validity of the SWOT analysis is temporary, meaning that it represents a specific and determined moment in a company's life. It is necessary to develop the analysis frequently, since the context tends to change, as do consumer behavior, technologies, and economic, political, and social scenarios.