Definition of SWOT analysis
The SWOT analysis summarizes the essential results of the analysis of external influencing factors and the analysis of the company’s internal capabilities, with the aim of finding out to what extent the company’s current strategy and its specific strengths and weaknesses are suitable, sufficient and relevant to react and act to changes in the corporate environment.
It therefore links the internal company situation with the competitive situation on the market.
The SWOT analysis is one of the most common strategic models that have their origins in the so-called strategic design school, in which the development of strategies is viewed as a coherent and well thought-out process. The SWOT analysis was developed by the US Stanford Research Institute in the early 1960s.
Information about the SWOT analysis:
Strengths / weaknesses – determine opportunities / risks
With the help of the SWOT analysis, the current competitive position of a company is assessed according to its strengths and weaknesses compared to the market leader or the main competitor. In addition, the company’s future development opportunities are assessed on the basis of the opportunities and threats that arise from the surrounding conditions in connection with the strengths and weaknesses. The results are entered in a SWOT matrix.
Strategic starting points:
The combination of strengths / weaknesses and opportunities / threats raises important questions. The aim is to identify strategic starting points by answering these questions:
- How should we use our strengths to take advantage of the opportunities?
- How should we work on our weaknesses to take advantage of the opportunities?
- How should we use our strengths to minimize the risks?
- How should we work on our weaknesses to minimize the risks?
- Is our current strategy suitable and sufficient to be able to react to the expected changes?
- Do our previous strengths and core competencies still fit into the world of tomorrow?
- Can today’s strengths become weaknesses tomorrow if we don’t develop them further?
- How can we best leverage our strengths in terms of opportunities?
- How can we react to external changes better than the competition based on our specific skills?
What specifically can we do better?
- Can new core competencies, business areas or service offerings be derived from this?
Once you answer all the questions, the future track will be clear for you and things will be smooth in terms of planning. All the questions help you to find out all the areas in which you need to focus and built expertise.
Sub-areas of the SWOT analysis
As already mentioned, the SWOT analysis is preceded by the sub-areas of company analysis and environmental analysis.
The company and environment analysis are combined in the strategic analysis, on the basis of which opportunities and risks are then analyzed.
While the company analysis records the internal situation that can be influenced by the company itself, the environment analysis evaluates those external factors that cannot be influenced by the company itself.
The first step in a company analysis is to evaluate the company’s resources and core competencies in comparison to its main competitors or the market or industry leader. The stronger your business analysis will be, the stronger will built the base of your business in the market.
This includes, for example, the qualifications and skills of employees, technological know-how, financial resources, market position and customer and supplier relationships. The results of the company analysis can be recorded in a strengths and weaknesses profile.
Business Analysis is very important. There are various methods that can be used to determine the criteria for a strengths and weaknesses of the company or profile.
- Stakeholder analysis
- Value creation analysis
- Gap analysis
- Resource analysis
- Core competence analysis