SWOT analysis is one of the strategies used to evaluate companies’ plans to achieve profits and grow business. It is concerned with analysing strengths and weaknesses and studying opportunities that companies can seize to control the market and the challenges and competition they face. It was named SWOT Analysis due to its interest in learning the four main axes on which companies’ marketing plans are based to arrive at a successful strategy that contributes to achieving their aspirations. The article explains SWOT analysis and how to do it. You will also learn why it is no longer critical for your organisation and how it helps you make the best decisions.
SWOT analysis is a type of measure used by companies, and it depends on analysing their strengths and revealing their weaknesses to identify the factors that can contribute to improving their results and raising their profit rates. It also depends on identifying and analysing the opportunities that the company must seize to avoid risks and achieve goals faster. In our article today, we learn together about SWOT analysis, its importance, and how to conduct it. We also provide several examples that clarify its mechanism so you can discover why SWOT analysis represents a clear vision for making the most critical decisions in your company.
What is SWOT Analysis?
Whether we call it the SWOT Matrix or SWOT Analysis, what is meant is the analysis or evaluation used to measure the company’s four main axes, aiming to develop clear plans to work on them. This leads to raising its market value as an institution while giving it control over the market and reducing the impact of competitive pressures to which it is subject. In addition to determining what the organisation can do to achieve the goal and linking the challenges it faces to achieve its goal with potential opportunities, strengths, and weaknesses, it ultimately produces informed decisions that the company adopts to reach success.
Elements of a SWOT analysis
SWOT analysis is one of the most efficient methods used by entrepreneurs and expert investors who want to achieve success and establish principles in their business to invest in the right place and produce goods suitable for the market. To do this, a SWOT analysis must be carried out, which enables them to clarify each of the following elements:
Strengths
The letter (S) represents the word SWOT, which means all the capabilities of the company, investor, or project that will help move forward and achieve goals—knowing that the analysis of strengths includes many details, including the types of available resources and their classifications, along with an analysis of what each member of the company’s work team can achieve to reach the goal in addition to determining the features that you want the audience to turn to you for, and ultimately identifying the attraction factors that make the audience request you and not anyone else.
Weaknesses
It is the analysis concerned with studying the reasons that may cause failure and keep you from achieving your goals. This section is concerned with analysing your weak points and identifying your shortcomings, mentioning the resources you cannot exploit properly, such as raw materials sold without manufacturing or that you cannot convert into a new product. This classification generally examines the reasons that lead to poor productivity or inability to achieve success.
Opportunities
It is the result of combining strengths and weaknesses, and it is how you determine how your company will succeed in achieving its goals by developing logical and realistic solutions that can be implemented. Opportunity analysis includes determining the resources you need to reduce your company’s weaknesses. Opportunity analysis is also an ideal way to eliminate the gap between the services you provide and market requirements while evaluating the goals that need to be achieved and determining what you can do to reach them easily.
Threats
Some people think that weaknesses are the same as challenges, but this is wrong because there is a fundamental difference between the two stakeholders. Challenges prevent you from reaching your goal or what holds you back. What is meant here are the causes or factors that cannot be controlled, in contrast to weaknesses that relate to the use or adequacy of resources or the team members working with you. Challenges may also appear when taking advantage of new opportunities, such as when technology is introduced into a project and the project plans are negatively affected. When evaluating challenges, you must analyse market changes, follow new customer trends, and determine the advantages that attract audiences to your competitors.
SWOT analysis table
Some companies tend to divide the four axes of SWOT analysis into two more significant categories: internal and external factors. According to this classification, the company’s strengths and weaknesses are internal factors because it can control them. While opportunities and threats are external factors that cannot be controlled except by developing internal plans to avoid their impact, the following table provides examples.
Strength point:
| Weaknesses:
|
Opportunities:
| Threats:
|
Why is SWOT analysis important?
Because it serves as the transparent path companies and institutions follow to solve their economic and financial problems, such as stagnation and lack of exploitation of resources and data, it also contributes to making companies’ performance better and their planning and decisions more aware in the short and long term. Its importance can be summarised as follows:
Seek more opportunities
The analysis contributes to discovering new growth opportunities, launching new branching projects, or investing in larger projects. The company grows and improves its strengths by seeing the opportunities and knowing how much they can be successfully exploited.
Focus on the exemplary aspects.
As long as weaknesses or challenges that need to be developed and addressed are identified, conditions will improve by directing attention to specific plans to give the right parties the attention they require. This will prevent further deterioration and redirect company performance shares upward.
Identifying obstacles
SWOT analysis contributes to evaluating all the details related to businesses and projects, which makes it easier to identify obstacles that delay profits and productivity or prevent them completely. By planning to avoid them or exploit them for institutional benefit, losses are reflected in profits.
Simplify complex data
Conducting a SWOT analysis involves a lot of overlapping data, but experience, brainstorming, prioritising, and collecting the points to be analysed can simplify things and help arrive at meaningful solutions.
Steps to conduct a SWOT analysis
Before beginning a SWOT analysis, you must first create an organisation profile that includes a description of the company and its operations, identify your target customers, and then proceed with the following steps:
- Conduct a SWOT analysis to set goals and determine what you can do to achieve them.
- Study the target market. You need to understand the extent to which the market requires you and what attracts customers to your products. Therefore, you must know what the people around you need, whether employees, partners, or customers. It also requires conducting some research regarding competitors around you.
- Determine your strengths, such as having qualified employees, having features that attract customers, or the like.
- Record the weaknesses you face in the business, such as difficulty in obtaining new customers, short staff turnover, insufficient market shares, etc.
- Can we take advantage of any opportunities? The next step will be to answer this question. These changes occur without your intervention, but if you deal with them well, they will positively impact your business.
- Identify threats and factors that may cause losses to your company, such as introducing new laws and financial or other risks.
By recording all these points, answers to questions become available to you and serve as clear lines for making decisions, working to develop your strategies, and exploiting circumstances to your advantage.
Examples of SWOT analysis
Below, we present three examples of implementing SWOT analysis.
Juhayna Company
| SWOT analysis for Juhayna Company Company name: Juhayna Food Industries. Business sector: food products. Headquarters: 6th of October City, Egypt. Information about the company: Safwan Thabet founded the company in 1983, specialising in dairy products. Its capital is 5 billion pounds. It owns five industrial companies, a sales company, and an agricultural production company. Its share value is 1 Egyptian pound. | |
Strength point:
| Weaknesses:
|
| Opportunities: Producing new products based on natural dairy. Opportunities to grow to purchase operations and supply products to neighbouring countries. Opening new sales outlets in tourist places. | Threats: Continued price increases may affect purchases. Global economic problems may raise the price of imported raw materials. The instability of buying and selling operations is due to the political situation. |
Nursery project for children
| SWOT analysis for Nursery project for children Institution name: Future Generations Nursery. Business sector: education. Headquarters: Kingdom of Saudi Arabia Information about the project: The project serves all parents who need to care for their children, whether in the morning or evening, and the capital is 500 thousand Saudi riyals. | |
| Strength point: There is an increasing need to enrol children in nursery school at a young age to develop their social skills. Customers are satisfied with the service because it is available at the best prices. The service can be obtained without prior reservation. The organisation’s logo is eye-catching, creating a quick mental association among customers. | Weaknesses: The service cannot be marketed electronically because it is limited to a specific residential area. There are no marketing plans for the service in its residential area. The budget is not enough to market and expand other nurseries. There is a lack of experience among some employees. |
| Opportunities: There are new educational methods suitable for young ages. Sponsored advertising on the Internet is less expensive than live advertising. There are centres nearby that provide practical training for child care and developing their skills. | Threats: The competition has become greater than ever. There is a competitor who has excellent marketing potential and is trying to dominate the market. The owner of a competing establishment donated a huge sum to the SPCA, creating a partnership between them. Media advertising is no longer free. |
Ready-made SWOT analysis models in PDF and Dox
We provide you with different forms of SWOT Analysis, ready to be filled with your company information, accompanied by a box to record the decisions that will be taken to improve the company’s performance.
Dox models
Model 1: Download From here.
Model 2: Download from here.
Model 3: Download from here.
PDF forms
Model 1: Download from here.
Model 2: Download from here.
Model 3: Download from here.
Success factors for SWOT analysis
There are many factors that contribute to the success of SWOT analysis in any organisation, regardless of the way it is conducted. In the following lines, we give you the factors that are the key to success that allow you to reach the optimal decision for your company:
Evaluate your resources
Although resources are capabilities available to you, it is easy for them to turn into weaknesses that cause the loss of your company, by exploiting them incorrectly or not exploiting them at all, so you must carefully evaluate your resources to determine the most efficient ways to exploit them.
Don’t forget the external factors.
External factors mean the circumstances surrounding you that you cannot control, such as the prices of the raw materials from which your goods are produced, the drought that reduces the production of agricultural land, and the like. As long as you are able to anticipate the occurrence of the problem, your priority will be to develop a plan to deal with it.
Use brainstorming
Unplanned, good ideas that are outside the traditional pattern should not be wasted. Record those ideas that you present to your colleagues in the work team, and use those ideas to come up with innovative and effective solutions to solve the problem that prevents you from achieving the desired performance.
Organise your thoughts
Use the most important principle. This principle teaches you to put priorities first, especially when time is not on your side. Therefore, you must always direct your attention and thinking to the basic matters and then plan for the secondary matters.
Conclusion
Experts must conduct a SWOT Analysis to prevent bias and oversimplification by some, so we provide you with the Qoyod accounting program that takes responsibility for you and provides you with the most accurate analyses that contribute to raising your company’s performance or directing your investments correctly. All you have to do is request a free 14-day trial of Qoyod, and you will notice for yourself how radically different the results are.
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