SWOT Analysis or SWOT Matrix is a methodology that serves to help companies grow. It acts decisively in strategic planning and helps managers organize this “escalation”.
Optimizing processes is all you want, isn’t it? For this task, it is very common to use the SWOT matrix.
After all, to start the next steps of your business, you need to be sure of what will be done, right? As well as the direction to be taken so that nothing is lost along the way.
Because it is in matrix form, the SWOT can be easily prepared and analyzed by everyone as soon as it is completed.
Therefore, the intention of this article is to show clearly how SWOT analysis takes place. It is to show how it is a crucial strategic ally of companies.
Therefore, we will go through its concept, on how it is elaborated and also analyzed. Also, we will split some applications from it so that your application is clearer.
So what is SWOT analysis or SWOT matrix?
From English, SWOT can be broken down into 4 parts.
- Strengths (strength);
- Weakness (weaknesses);
- Opportunities ;
- Threats (threats)
You may have already seen the term SWOT analysis (Strengths, Threats, Weaknesses and Opportunities). It’s the same thing – just “Brazilianized”.
SWOT analysis or SWOT analysis, it doesn’t matter. The two have the same focus. Which? The strategic planning of companies – and new projects as well.
After all, this is not just a business diagnosis. SWOT also attacks the context where he is or wants to be inserted.
From the result of the SWOT analysis comes the SWOT matrix. Through it, managers are able to identify factors to be worked on (positive and negative) to leverage their business.
Although unofficial, its origin dates back to the 60s. It arose at Stanford University, California/USA. Your author? Well, she is credited to the study carried out by Albert Humphrey with hundreds of companies at the time.
Got it, but what is the use of SWOT analysis?
Every new project, or new path to be followed by any company, must be surrounded by care. Within this reality enters the SWOT analysis, which is crucial to strengthen decision making.
It doesn’t matter the size of your business. The SWOT matrix can help anyone make more assertive decisions after understanding the general context.
Among the benefits of its application, we can highlight some such as:
- Security for decision making;
- Reading the context in which you are or want to be inserted;
- Read competitors and predict scenarios;
- Mapping actions to grow in the market in which it operates.
It is common for managers to do the SWOT analysis alone. But, you know that saying well…:
“Two heads are better than one.”
In other words, it is necessary to bring more people to the action. Although the manager has a more strategic view of the business, it is necessary to think about the whole.
Certainly, when everyone in the company is involved, it is easier to understand the context of the business and the market.
In addition to being possible to identify repeating scenarios. So, get the opinion of the technicians in each area to make the results more authentic.
Not to mention that this will show the importance that employees have for the company. This is essential to their motivation.
What are the 4 elements of SWOT analysis?
To build the SWOT matrix, you need to pay attention to two basic items. Two analyses, in fact: of internal factors and external factors.
The first exposes the strengths and weaknesses that your business has. The second addresses opportunities as well as existing threats.
That said, let’s delve a little deeper into these two items.
Analyzing internal factors
First, we list some analysis points to create the SWOT matrix. They will identify, within your organization, what is strong and what is weak.
So keep an eye out for:
- location of your company;
- built reputation;
- time to market;
- available financial resources;
- available human resources;
- people management;
- marketing performance;
- ability to make debts;
- physical structure, among others.
These are some vital items for self-analysis in the context in which one is immersed. Looking inward, at first, is essential. Only in this way is it possible to be clear on what your company is strong and what it is not.
In other words, having these clear and mapped points makes it easier to know what to focus on. Therefore, the participation of all employees as mentioned above is vital.
On the other hand, of course, it is not easy to act to correct all the faults right away. Likewise there is no magic formula for this.
At this time, it is up to the manager to see what is a priority to be corrected. What is crucial for the company to achieve the results it wants. Also, of course, define actions that can fix this as soon as possible.
In the same vein, points that are positive should be extolled. And here comes in, the role of managers comes in again.
Which of these are your differentiators in the market? Know how to identify, explore and elevate them.
Always have a good relationship with the customer. After all, they will also be able to tell you what you are really good at.
Likewise, make it clear what you excel at and work hard to correct the flaws.
Analyzing external factors
Opportunities and threats. It is, in order to identify them, that the analysis of external factors within the creation of the SWOT matrix is useful.
Unlike internal factors, external factors are not under your company’s control. They will always exist and there is very little that can be done to stop them.
Therefore, it is critical to have the utmost attention when performing the SWOT analysis. Above all, she needs to fulfill the mission only in the context you are in.
As a result, we split this task into two moments. The analysis of the macro environment and the microenvironment.
It is about what is beyond the segment in which your company operates. It’s a much broader and broader issue, 100% out of control.
Above all, the factors to be considered are:
- politicians – new governments, bills, among others;
- economic – inflation, investments, purchasing power of social classes;
- social – education, birth rate;
- cultural – values, consumption habits, beliefs;
- technological – new technologies that can make your business obsolete;
- natural resources – sustainability, pollution, difficult access.
In the SWOT analysis, detailing the microenvironment refers to the sector in which your business is located.
Which companies compete with yours? What are the barriers to overcome in order to grow?
These are some issues to be taken care of through the analysis of:
- entry and exit barriers;
- entities or organizations with influence in the segment.
How to do a SWOT analysis?
Now that you know how to map the strengths and weaknesses of your business, let’s set up the SWOT matrix?
For example, let’s say you plan to open a seafood restaurant. A franchise, actually. And it will be located on the beachfront in a capital of one of the most visited states in Brazil.
Afterwards, the manager talked to everyone. Heard opinions from experts and others who also have similar establishments.
So, he arrived at the following diagnosis:
- Excellent location;
- Great food;
- Special service.
- Little disclosure;
- High cost of dishes.
- Climate that favors tourism all year round;
- Country’s economic recovery.
- Lack of public safety.
How to change this scenario?
From now on you know precisely what is good and what is not. Also, you already understand how external factors help or hurt you.
As a result, it’s much easier to know what to do!
- The problem of insecurity, make an agreement with some parking in the region. Or partner with racing apps for customer discounts;
- If the restaurant is known, invest in publicity. Hotels, visitor center, among others can be good outings;
- Food prices do not scare away customers, invest in promotions or discounts on collective shopping sites.
These are just a few examples of what can be done after performing a SWOT analysis.
It is up to each manager to understand their reality. As a result, then adapt changes that can be healthy for the business.
Above all, be aware of what happens. Ever. Also, have your collaborators. Discuss solutions with them and look for best practices.
Therefore, it is much easier to identify bottlenecks, sell more and better and grow!
So, how can we help you?
Enjoy and read two articles on our blog that may be useful for you.
The first addresses what is the BCG matrix and why it is important to understand its concept.
The second talks about the agile methodology. It improves internal processes and elevates the work of everyone in the company.