Definition: This is a SWOT analysis
Strengths, weaknesses, opportunities and threats are the four criteria which make up a SWOT analysis. The acronym makes the content easy to remember. With the help of a SWOT analysis, you can undertake a market or competitor analysis which helps your (future) organization to position itself with a defined unique selling point and also minimize or mitigate risks in advance.
SWOT analysis: Step by step to success
Anyone who has never carried out a SWOT analysis should start with an analysis of the business environment:
- Who is your competition?
- What laws, regulations and trends impact your business?
- Do the economic or political situations of the continent, country or region directly or indirectly affect your business?
Note all these points. In the second step, you should think about your company’s strengths and weaknesses:
- What advantages does your business offer customers/potential customers in comparison to the competition?
- What weaknesses does the business (supposedly) have?
The results of both the competition and environmental analyses have an influence on the strengths and weaknesses of your company. Tip: Document, either in writing or pictorially, all the information relating to the individual points.
SWOT analysis: Identify opportunities and threats
In the third step, consider the opportunities and threats which your company faces. An opportunity, for example, might be if one of your company’s strengths aligns to an external trend. It would be a threat if a weakness could, due to an external event, become a risk to the company.
When you have anticipated all the opportunities and threats which could emerge from your company’s strengths and weaknesses, the initial SWOT analysis is complete. However, with this result, you should develop recommendations and measures for action to make the best possible use of your opportunities and to minimize the threats. If, for example, the SWOT analysis reveals that a perceived opportunity is being embraced by the competition and may no longer be in such demand by customers, you should not rely on this opportunity for your own company. However, if you can identify a unique selling point in one of your opportunities which is, at the same time, in demand by customers, you should focus on this more intensively in the future.
Checklist: SWOT analysis
Step 1: Analyse the market and the competition
Step 2: List the strengths and weaknesses of your organization
Step 3: From the first two points, identify opportunities and threats
Step 4: Generate recommendations and measures for action