A Beginner’s Guide to SWOT Analysis
There is a lot of competition in the industry for organizations competing against each other for customers. Every company is unique based on their people, processes, and products. Some companies have a significant advantage over others, while some businesses struggle even to get noticed by their prospects.
One significant thing every organization has in common is the quest to continue to develop their business. The achievement of which, lies in different methods, out of which the SWOT analysis has been hand-picked for better illustration and understanding.
The SWOT Analysis: a proper definition.
Seeing “SWOT” should suggest something; “it should be an acronym,” and yes! You are right. SWOT stands for Strength, Weaknesses, Opportunities, and Threats.
SWOT is a mechanism employed by organizations to enable the company to identify areas of strengths, weaknesses, opportunities, and threats.
Strengths: The strength of an organization is the competitive advantage that the company has over their competitor. This strength can be a function of the company such as manufacturing to produce a product faster, cheaper, and better than their competitors.
Weaknesses: The weakness of an organization is a function that a company does not do well at all. An example will be if a company has horrible customer service. Even if the company has a great product, if the customer service is terrible then it would ruin the customer experience.
Opportunities: These are instances which when they occur and fully utilized leave the individual or organization at an advantaged position or gives them an edge over contemporaries. An excellent example of an opportunity is that if you automate processes with information technology. If there was a process that would typically take five days to complete, but because of automation it only takes one day then this is a big opportunity for improvement.
Threats: These are possible occurrences that endanger the organization or individual or bring harm to them, (they also hamper efficiency). An example of a threat to an organization is a disruptive technology that would make your business obsolete.
The four factors of this mechanism (as outlined above) are split into two categories;
The Internal Factors
They are tagged internal factors because they are determined within and not without, these are strength and weaknesses. For one to pinpoint one’s strength or/and weaknesses, one has to undertake a critical examination of one’s self and after a proper review (often based on one’s action and inactions), one can identify areas of ease and difficulties, dittos for organizations.
Although, a bit more complicated for organizations; because it is made of several constituents; unlike an individual.
The External Factors
These are the other two factors whose made of determination are external- without rather than within. They are opportunities and threats.
Wiktionary gives a brief but sufficient definition of both factors as;
Opportunities: A chance for advancement, progress or profit.
Threat: An expression of intent to injure or punish another.
So basically, the external part of this mechanism is to determine the opportunities and threats that one (an individual or organization) might come across; the aim of this is mainly to be prepared and not caught unawares.
The next thing is to re-classify them based on the effects they have on the individual;
1. The Positive Factors
2. The Negative Factors
The positive factors are the desirable factors which the individual/organization should capitalize on for the singular benefit of either party (individuals/organizations) or to further make a distinction between them and their peers.
These positive factors are the strengths and the opportunities.
The negative factors are the other factors which if not quickly and adequately checked might hamper the existence and efficiency or in general, endanger the individual or organization.
These factors are weaknesses and threats.
How the SWOT Analysis Works
It is a simple analysis that does not require a high level of technical; algorithm or whatever mastery, it involves identification and categorization.
All you have to do is to pick out your SWOT components, i.e., your strengths, weaknesses, opportunities and threats, and what next? You analyze.
The major work here is to identify the factors and to ensure that the elements are rightly classified before analysis.
One big problem encountered by many during this process is that at particular times; one more of these factors might appear to be appropriate under more than one category.
For instance: if one considers one’s ability to carry out tasks in record time a strength, one might be mistaken. It could also be a weakness in that this ability might make the individual lazy and as such, the person gets accustomed to procrastination and struggling to meet deadlines.
The way to go around this is through further evaluation of oneself to ascertain which side of this ability he engages more often than not, and when one succeeds in learning it, the factor is categorized accordingly.
Another problem encountered while undertaking this analysis is that there may seem to be an endless number of factors. For instance, an individual wants to pick a career path and while listing strengths there might be a ton of other qualities that an individual possesses might be irrelevant for the analysis. The focus should be on factors like areas of interest, ability to work in a team and other factors that directly affect the purpose of the review.
Taking the above into consideration, undertaking the SWOT analysis might be half as tedious as it was expected to be. The goal of the study, however, must not be forgotten; after undergoing the processes, the next thing is to capitalize on the positive factors and keep the harmful elements in check to avoid unpleasant surprises.
You want your organization to be at the top of the cadre, you want to be a better person, or you want to progress in any area of life? The SWOT analysis should be your next step!