SWOT Analysis is a simple and useful method that allows us to group and find strengths, weaknesses and to identify potential threats and new opportunities in the market. In this blog, we are gonna teach you about this Analysis and also give some examples.
WHAT’S IN IT
- What is SWOT Analysis?
- Precautions while making SWOT Analysis
- Advantages of SWOT Analysis
- Limitations of SWOT Analysis
- Example of SWOT Analysis
What is SWOT Analysis?
SWOT analysis plays a significant role in any business. The full form of SWOT is Strength, Weakness Opportunity & Threats. Strengths and weaknesses considered are internal factors because they exist within the company whereas opportunities and threats are considered external factors because they exist outside the company.
We use SWOT analysis to gather information about any industry, company, products, or even people.
It is a simple but useful method that allows us to group and find strengths and weaknesses and to identify potential threats and new opportunities that exist in the external environment.
Also, the SWOT framework could be useful when you want to understand the areas in which your firm performs well and the ones that need improvement.
A SWOT diagram analyzes a product or business by focusing on each of the four factors. It typically consists of four boxes one of each area and the details of the analysis are written in the corresponding box.
The very first thing is Strength. These are the critical success factors of your business that are strong and give you an advantage over other competitors.
To make your business most profitable, you have to figure out how to build more products that become your strengths. A SWOT analysis helps you to figure out the parts of your business that are doing well.
The Strength area includes the core products or provisions where the business excels and has a big competitive advantage over competitors.
By knowing your assets, you will be able to continue at a high level. But you will need to find ways to create more strength to grow your business.
The next thing is Weaknesses. These are areas that need improvement. Such vulnerabilities place their company at a disadvantage when they competing against other firms.
You have to figure out your weaknesses and improve or rectify them before they hurt your business badly. Usually, the disadvantages resulting from other companies having a competitive advantage.
This stage requires a detailed and brainstorm analysis by your partners or others’ heads to know what is going wrong within your organization.
After identifying or knowing your strengths and weaknesses, you’ll try to identify the best opportunities available for your business as fast as possible before your competitor takes the lead.
Opportunities can be seen as favourable factors existing in a company’s external environment. Taking advantage of opportunities depends on how skilled a company’s top management is.
The top management team must be able to know, recognize, or even predict the opportunities and then take action when the time is right.
To identify opportunities, try to pinpoint openings in the marketplace that you can take advantage of to help your business grow.
Opportunities are generally caused by external factors such as price fluctuations or even new trends in the market. But before grabbing any opportunity, you must consider your strengths and weaknesses or they will become your biggest failure.
Next, try to find out how to respond to threats to your business. Market fluctuations, government policies or public interferences are all external factors that may badly affect your business. To ensure success, you must identify these threats and find ways to eliminate them.
Just like when figuring out opportunities, you need to consider your strengths and weaknesses, the same when assessing threats.
It’s important to note that strength for one part of your organization might be a weakness for another.
For example, the old fashioned brand image and hundred-year-old history of a company might benefit the farm equipment division but it might not be such a boon for the new tech division.
For this reason, you might want to perform a different SWOT analysis for each product or part of your business, rather than performing the analysis for the business as a whole. It gives you an unclear analysis.
Precautions while making SWOT Analysis
- Try to keep your SWOT diagram brief to the point.
- Include the most pertinent details but keep in mind that don’t bog it down with too much explanation within the diagram.
- You can go into greater detail during meetings or in reports.
- Be sure to utilize employees from several areas of your company.
- Consider feedback from your partners and customers as it a variety of perspectives will result in a more thorough analysis.
- Keep the core objectives of your company‘s business plan in mind while performing your SWOT analysis.
- Keep updating your analysis regularly.
- You may also prefer to revise the analysis quarterly or yearly.
Advantages of SWOT Analysis
- It shows the reasons why people are unable to get success.
- By knowing your weakness, one can overcome and escape threats.
- Its framework makes you unique by showing your real talents.
- By knowing your strengths, one has the potential to turn into a quality person.
- It requires no extensive training or skills to be used.
- It discloses opportunities that you need to be utilized.
- A SWOT Analysis can be used for Brainstorm meetings.
- It can enhance the quality of an organization’s strategic planning.
- It helps you to study and research your competitor.
- SWOT Analysis can be used for proper planning and product evaluation.
- You can use SWOT Analysis on various people to get an idea about them.
Limitations of SWOT Analysis
- This model depends too much on subjective intuitions.
- It’s disordered and lacks the predictive power to be successful.
- SWOT analysis will rely on the level of expertise and objectiveness of people doing them.
- If not monitored, strength can become weaknesses while opportunities, if not capitalized and when seized by competitors, can become threats.
- This model does not provide actual answers to what strategies should be implemented.
- Sometimes, it can be quite difficult to categorize the four factors.
Example of SWOT Analysis
Enough learning, let’s try to perform SWOT Analysis on a company like Apple.
SWOT Analysis of Apple
Strengths of Apple
- Most Valuable Brand in the world
- Most Reliable Company
- Availability of Top Technologies
- Top Innovations
- Most Loyal Customers
Weaknesses of Apple
- High Priced Products
- Incompatibility with Other Software
- Less Variety in Designs
- Limited Distribution Network
- Narrow Product Line
Opportunities of Apple
- More Customer Base
- Expansion of Distribution Networks
- Artificial Intelligence
- High- tech Gadgets
- Creating More Products and Technology
Threats of Apple
- Corona Virus Pandemic
- Competition by other Tech Giants
- Increased Tariffs on Countries
- Duplicity of their Products
- Potential Market of Android
Similarly, let’s find out the SWOT Analysis of Google
Strengths of Google
- Globally Trusted Brand
- Simplified Approach to Every Product
- Most Trusted Search Engine
- Most Used Operating System
- Broad Product Line (OS, Music, Payment System, Web browser, etc.)
Weaknesses of Google
- Most Income comes from Advertisement
- No Social Media Platform
- Gmail and Youtube Channel Hacks
Opportunities of Google
- Android Market
- Worldwide Internet Growth
- Strategic Acquisitions
- Artificial Intelligence
- Self- Driving Cars
Threats of Google
- Increase of iOS users
- Competition from Bing in the Search Engine
- Chinese Bans
- Competition from Amazon in the Cloud Computing
Let’s conclude the blog by summarizing the above information in a table
|Meaning||Things that your company excels in.||Things that your company lacks.||Any circumstances in the market that you can take advantage of.||Things that may affect your business in a negative way|
|Example||Marketing, Management Team, etc.||Resource limitations, unskilled staff, etc||Government programs, New Technologies, etc.||Emerging Competitor, Changing Market Need, etc.|
Also read our blog SWOT Analysis क्या है? SWOT Analysis कैसे करते है? Complete Guide