What is a SWOT and how you can use it to your advantage

[jrineakter]

The SWOT is an internal and external study of the company with the objective of determining its real situation within the market. The name, which is actually an acronym, corresponds to the union of the first letter of the words Weaknesses, Threats, Strengths and Opportunities.


To put it in more lofty terms: SWOT is the strategic analysis tool par excellence in the business world. It is used to find solutions to old problems, to find the obstacles that hinder the growth of our business, to find a solution to difficult-to-decide problems and to identify possible necessary modifications.

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How to make a SWOT?
To begin, we need to identify the current situation of the company, observe the parameters of our internal and external activity, collect all this information and organize it so that it can be easily used in the analyses that we will undertake next.

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Internal analysis.
In this section, a study is carried out on the resources and capabilities that the company has, analyzing both quantitatively and qualitatively the activity of the organization. In this sense, we have divided the business structure into:

Strengths. Here we highlight the business's strong points, those elements that differentiate our company from the competition. To delve deeper into these strengths we can use a series of questions:

Weaknesses. In contrast to our strengths, our weaknesses are those areas where we are losing ground compared to the strength of our competition. Here we will highlight everything that hinders our evolution and development, and we will do so by answering the following questions:


With this analysis we determine the threats to which our company is exposed and the business opportunities that may arise. Firstly, we must identify all those factors that may affect the company's activity, taking into account:


After evaluating these four points, we will determine which ones can have a positive impact (opportunities) and which ones can have a negative impact (threats).

Opportunities. Factors whose presence in the market represents a competitive advantage over other companies in the sector. To find out what these factors are, we can ask ourselves the following questions:

Threats. On the contrary, this section includes all the negative factors that put the good health of our business activity at risk. We could clear them up by answering:


After analyzing the four points mentioned above, a company has four basic strategies at its disposal with which to use the data extracted from the SWOT analysis to its advantage.

Offensive (sum of strengths and opportunities)
This strategy consists of exploiting all those points that represent a strength or opportunity for the company, so that it can position itself in the dominant part of the sector. As the company grows, it eliminates all possible weaknesses and threats that may arise. Obviously, this is the strategy chosen by most organizations.

Defensive (sum of strengths and threats)
With this strategy, the company relies on its strengths to deal with threats or, in other words, combats the negative effects by reinforcing the advantages, especially internal ones, that the company has. It is a complicated strategy because it walks a very fine line and, as the song says: balance is impossible.

Reorientation (sum of weaknesses and opportunities)
Here we will take advantage of the opportunities presented by the market in order to address our own weaknesses. The problem with this strategy is that many times these same weaknesses hinder access to opportunities, so imagination is required to turn them around and turn them into strengths.

Survival (sum of weaknesses and threats)
Somewhat desperately, this strategy seeks to minimize all the internal factors (weaknesses) and external factors (threats) that undermine a company's trajectory. This is possibly the most uncomfortable situation, and certainly the most difficult to face, since if the weaknesses are extensive, it will be difficult to overcome the threats; however, if it happens and you manage to move forward, the road to success will be much more pleasant and deserved.