What is SWOT analysis and what does it do?
Many branches of knowledge have the keywords that it is impossible to imagine those sciences without those words.
For example, if we extract supply and demand from the economy, there will not be much left of it, despite the massive body of this knowledge.
In the same way, if we take strategy, opportunity, threat, strength, and weakness, we have diminished an important part of the strategy. The four terms commonly referred to as the first letter of their English equivalents, as a SWOT or SWOT matrix:
The SWOT matrix can be considered as the oldest strategy tool, and the SWOT analysis based on this matrix has become the standard part of most of the books and official references in strategic thinking and strategic thinking.
Although we often have enough familiarity with this tool, we focus on a brief overview of this tool, with the aim of making the subjective image of friends complementary to the SWOT analysis as well as the formation of a common language in this field.
The first step in using the SWOT analysis is to list the strengths, weaknesses, opportunities and threats, each one individually and accurately. The two terms of strength and weakness refer to the internal state of the business, and opportunities and threats speak of the external environment of the business:
A SWOT matrix to be used later for SWOT analysis. But its framework needs to be changed
Therefore, the following can be examples of strength and weakness in a business (SW):
- High / Low liquidity
- Access to or lack of technical and specialized knowledge
- Owning a strong base among customers
- A high or low share of human resource costs in the structure of business costs
- Simple or difficult access to vital resources for businesses
- Motivated by the high or low labor force
- High quality or low products
- Accessor lack of access to a powerful distribution network
By contrast, the following can be examples of opportunities and threats in a business environment (OT):
- The fluctuation of the rial against the dollar
- The stability or instability of the laws in the field of the activity of a business
- The presence or absence of large rivals with state support and subsidies
- The prevalence or prevalence of the culture of using a business’s products
- Changes in population pyramid and demographic characteristics of the community
- Changes in the technological infrastructure of the country
- Advances in the field of Information Technology
- Strengthening or weakening the country’s political relationship with other countries
- If we put the strengths, weaknesses, opportunities, and threats in a slightly higher framework, we will come to this matrix:
- Sample SWOT matrix completed
SWOT matrix should not be confused with SWOT analysis. This matrix is just a way to show the status of a business. But the main goal of listing strengths, weaknesses, opportunities and threats is to look at strategic options for a business. Otherwise, the listing of strengths, weaknesses, opportunities and threats, by itself, can not be miraculous and influential.
For this reason, the next step after determining the components of S and W, and O and T is to consider their relationship with each other and their effect on each other: