All the times you needed to make important decisions, certainly, were situations in which you had to and think about all the details. One of the main and tools to achieve it safely is the SWOT analysis.
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Continue reading this post and you will discover in a simple and useful way what analysis is! SWOT, what is it for and how to apply it in your business!
What is SWOT analysis?
The SWOT analysis is an acronym where its initials in Spanish correspond to the words Strengths, Weaknesses, Opportunities and Threats.
This method, also known as SWOT analysis in English, is one of the best known in the business administration sectors.
Widely used for short, medium and long term planning and also in strategies to create new projects. This happens because this analysis consists of the diagnosis of the business and the environment in which you are.
To do this, a table is created, better known as a SWOT matrix, which helps in the survey of business contexts that must be considered when making essential decisions in the day to day of your company.
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What is the SWOT analysis for?
With this analysis you manage to establish the strengths, weaknesses, threats and opportunities of the entrepreneur. In other words, it helps to understand the decision-making process in any environment, since it provides a broad view of the scenario, the situation and the competitors.
The idea of this tool is to diagnose what you can promote and the factors that you must monitor, so that they do not compromise your business. This can provide you with such detailed knowledge that your company can even anticipate possible surprises that theoretically would not be planned.
If you have any doubt about which path to take to reach your , opt for this analysis, since it is very assertive, as well as being easy to apply. This ease and assertiveness made this methodology popular and could be used by companies from various sectors and different sizes.
How to create your SWOT matrix?
This is a fairly simple tool to use. There are many free options available on the Internet. However, you can also create your SWOT matrix manually or with editing tools.
To start doing a SWOT analysis, you need to know your business deeply. In other words, before you start, make a list of the general panorama in which your company is: the strengths and weaknesses that put you at a disadvantage or an advantage in relation to .
Remember that your company has the scope to eliminate a weak point or improve a strong point.
Before placing the variables in the SWOT matrix, keep in mind what is essential for a business to be successful in your of action, that is, mentally describe what elements are essential to achieve success within your sector.
Step by step to create your SWOT matrix:
First, create a table with two rows and two columns, like in the following image:
To carry out a SWOT analysis you need to think about some points that are important to identify the strengths and weaknesses of your business, for example:
- Location;
- Market experience;
- Methodology;
- (what consumers and competitors are talking about your brand);
- Logistics.
Opportunities and threats refer to what is outside of your control. In other words, no action of the company can influence it, since it is a characteristic of the market in which you already act or intend to act.
There are two external environments that the SWOT analysis identifies: the micro and the macro environment. By observing these variables, you will be able to identify market trends and prepare for them.
In the microenvironment, you must evaluate how your competitors, customers and suppliers work.
In the macro environment are all the environmental factors that are outside your market of action, that is, political and economic decisions and the behavior of society should be the core of your analysis.
How does SWOT analysis work in practice?
To help you understand how the SWOT analysis works, we are going to give the fictional example of Juan, a 39-year-old tour guide who works in a major tourist region.
His dream is to create an online gastronomy course to spread the local cuisine and guarantee personal satisfaction and .
Let’s continue with the analysis!
1. Strengths
When evaluating strengths and weaknesses it is essential that you think about the factors that are related to success in the sector in which you want to act.
In our example, Juan’s knowledge of local gastronomy and a deep understanding of how his customers behave are Juan’s greatest strengths.
2. Opportunities
Do you remember that opportunities and threats are not within the reach of entrepreneurs?
So, we can put as an opportunity the current interest of society in travel and gastronomy, especially people with considerable purchasing power and who would be willing to pay for Juan’s classes.
Another opportunity to be considered here is the popularization of the EAD, which guarantees a virtually infinite audience.
3. Weaknesses
However, Juan intends to act in the market for , in which you have no experience yet. In this way, the lack of practices in this specific area of action is its weak point.
In addition, to give online courses, Juan would have to have to record your classes and a .
The ideal, at this point, is to begin to imagine in that could make up for those weaknesses.
4. Threats
As gastronomy is in fashion, there are already several blogs and channels on the subject that offer free content. Therefore, the competition can be very strong and represent a threat to Juan’s business.
In that case, what you can do, for example, is to find a different form of content or promotion that allows you to beat the competition.
Evaluating the SWOT Analysis
After completing the SWOT analysis, the ideal is to make an in-depth evaluation of each issue related to your business. In this way, this tool will help you make assertive decisions.
With the SWOT analysis ready, it’s time to put actions and strategies into action!
The ideal is to understand how the variables: strengths, weaknesses, threats and opportunities are related so that you can maximize your advantages and minimize your disadvantages.
1. Strengths + Opportunities
The ideal here is to think of the strengths of your business as catalysts for opportunities.
In the case of the online gastronomy course, culinary knowledge and customer behavior enhance the opportunity to enter a market that values the experience with local cultures.
Thus, Juan could use his performance as a tourist guide as a differential to attract his .
2. Strengths + Threats
In our example, Juan’s experience as a tour guide can reduce the threat of entering a market with strong competition, because he already knows what that public expects from a gastronomy course.
In that case, an important strategy would be to use your name as a brand for those who are already customers or so that your have the opportunity to buy your gastronomy courses online.
3. Weaknesses + Threats
In the case of Juan, the lack of knowledge in online courses and the fact that he does not have equipment for recording his materials, combined with the wide competition of gastronomy content on the Internet, could be a problem.
However, there is a possible way to change this situation. Juan can create an MVP of his product, which is like a simpler version of his idea, however, with all the resources he needs to function.
(See our tips for ).
4. Weaknesses + Opportunities
To transform weaknesses and threats into opportunities, another possibility is to find a partner company so that Juan knows the best means of recording and disseminating his videos.
This is golden advice so you can speak directly to your audience about gastronomy in the right language and using the resources you already have.
Start applying the SWOT analysis
SWOT analysis is an incredible analysis tool because it is so easy to apply.
However, this process requires commitment so that you can identify weaknesses and threats in a practical way and, above all, find the right solutions to transform them into opportunities.
The process allows extensive knowledge of the market and traces a safe path to be followed by the entrepreneur, becoming a learning tool for both your business and the market in which you want to act.
Did you like this information and want to have more resources to know your competitors and your own business? Take advantage and discover the .
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