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SWOT stands for Strength, Weakness, Opportunities, and Threats. The SWOT analysis is the compiled evaluation of a company. The ultimate objective of a SWOT Analysis is to facilitate the organization to make long term fruitful decisions by providing complete awareness about the concerned aspects.
Besides, the SWOT analysis also helps in discovering recommendations and strategies by focusing on strengths and opportunities to overcome weaknesses and threats. A company or organization must perform SWOT analysis before launching new campaigns and new initiatives to have insightful information to execute the plan and troubleshoot any problems that come along the way.
How to Perform SWOT Analysis?
The 2020 guide to SWOT analysis is not just about performing a SWOT analysis, but it’s also about how a company or organization could incorporate SWOT analysis in its wider strategic planning process and formulation of major decisions.
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SWOT Analysis Performance:
The analysis is performed in 4 steps;
Step 1: Analyse Strength
The foremost step is to answer the question, “What are we good at”? For this purpose, several aspects are scrutinized, and these are;
Financial Strength: What is the company’s major source of financing.
Customer’s Strength: The size of the customer network? How and where is its customer’s growth? Type of customers, and why are they choosing your company over your competitors?
Internal Strengths: How strong is the internal foundation of a company, and how is the company’s relationship with its partners and customers?
Learning and Growth Strengths: The company’s potential and capability are analyzed to determine progress.
Step 2: Analyse Weakness
The next question that needs to be answered is, “Which areas of the company need improvement, and what are its flaws or weak points”?
Financial Weakness: The company’s weak financial areas and aspects are scrutinized during SWOT analysis. It could be related to customers or products.
Customer Weakness: How does a company need to improve to gain improve its customers? The concerning aspects in this regard are Investment products, competitive prices, location, etc.
Internal Weakness: Inspection of an organisation’s internal flaws is very important. Find out the areas that need improvement, the obstacles, or weak points that stopping the organization from expanding and progress further.
Learning and Growth Weakness: Inspection over this aspect tends to determine the challenges that the company needs to meet and the grooming or modification that needs to be conducted in the company to meet those challenges.
Step. 3: Analyse Opportunities
This is the most important aspect that needs to be scrutinized.
Financial Opportunities: Find out the biggest opportunity that could improve your finances effectively. It could be a new investment or some new product.
Customer Opportunities: Figure out opportunities to gain and generate more customers.
Internal Opportunities: The SWOT analysis inspects the aspects that could improve the internal matters of a company.
Learning Opportunities: What are the company’s options to provide its staff with more learning opportunities and enhance the company’s growth.
Step. 4: Analyse Threats
After carefully analyzing strengths, weaknesses, and opportunities, the last aspect that needs to be analysed is the potential threats to which the company is exposed. The threats should be analyzed from every angle, including financial threats, customers’ threats, infernal threats, learning, and growing threats. Only after analyzing the threats, a company could formulate a strong strategy for its progress and proceedings.
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What to do next after successfully performing SWOT analysis?
Compile the Result of Analysis
Compile and categorize the results obtained from inspecting the four areas of an organization by SWOT analysis. Label the strengths and weaknesses as Internal origin, while opportunities and strength would be labeled as an external origin. However, the strengths and opportunities help an organization’s strategy, while weaknesses and threats are potentially harmful.
The compilation would give you a clear picture of all the positive options and negative possibilities.
Start Formulating a Strategy Map
A strategy map should be a visual and a single-page description of your organization’s strategy. By considering the results of SWOT Analysis, a company could formulate a foolproof strategy map.
The company needs to align its strategies with SWOT analysis. For example, if a financial perspective is your company’s top priority, then you need to consider all the financial opportunities as stated in the SWOT analysis and link those in financial planning. Your strategy map must reflect the potential aspects stated by the SWOT analysis.
Communicate the Strategic Modification to your Organization
After you have created a map, you might have modified the old strategies as well. You need to run a “Brown paper exercise” in your organization, involving all members. Discuss and disclose all the necessary aspects with your team and ask them to contribute to the ideas and discussion. Welcome their ideas and respect their opinions.
Introduce Programs to overcome Weaknesses and hunt Opportunities
SWOT Analysis is just the initial step; the rest are to be followed. You still need to introduce and implement certain measures that facilitate your organization and team to overcome the weaknesses, to improve, and to hunt opportunities.
Weakness: Let’s suppose the SWOT analysis stated that your organization lack skills for effective customer care services. You need to introduce programs that help your team to overcome this weakness. It could be a conduction of different workshops to improve communication skills and soft skills. Besides, you could also hire trainers to groom your customer care representatives.
Opportunities: You might have shortlisted the most beneficial opportunities during SWOT analysis. Now, you need to define those opportunities and conduct certain measures to make the best out of those opportunities.
Review the Strategy
With every change in trends, challenges, and circumstances that a company witness, there is a need to review and modify the strategies accordingly. Don’t stress out if the SWOT analysis has revealed many flaws; instead, take advantage of the analysis and introduce modifications in your strategy. Keep working on crafting a strong strategy and keep reviewing it with the changing trends.
SWOT analysis is an essential tool for any business, big or small. Even the companies like Amazon conduct Amazon SWOT analysis, owing to it’s importance and benefits.