SWOT analysis remains one of the most effective tools in strategic management. The essence of the SWOT analysis is to assess the internal and external factors of the company and evaluate the risks and competitiveness of the product in the industry. Gürel (2017) claims that “while external analysis focuses on the environmental threats and opportunities facing an organization, internal analysis helps an organization identify its organizational strengths and weaknesses” (p. 994).
There are several main principles for conducting this kind of assessment. First, a SWOT analysis should be carried out with the participation of several specialists rather than just one. The more experts are involved, the more objective the assessment will be. Subsequently, each factor of the analysis must be supported by specific data provided by different pieces of research.
Next, one needs to prioritize the most important analysis factors, giving them more focus in order to avoid data dispersion. SWOT analysis values the assessment of strengths, weaknesses, opportunities, and threats above all other aspects. Finally, one has to look at the strengths and weaknesses of the company not through the prism of their own perception but rather through the eyes of competitors and customers. Are the benefits really that significant? Are the disadvantages truly this minor? For an objective analysis, one can host a survey among customers and partners.
Conducting a SWOT analysis is useful for any company, regardless of the field of activity and the current state of the competitive environment. However, there are three main reasons for doing a SWOT analysis. For example, improving business processes or expanding a product line can be completely useless if the product is outdated, and new competitors have built a more efficient way to interact with customers.
Regular performance of SWOT analysis will allow the company to objectively assess what is happening in the industry and adapt to changing circumstances subsequently. Another suitable case for conducting a SWOT analysis is the summing up of the results of work over a certain period. A timely evaluation of the company’s performance will help all decision-makers to ensure that they have the same understanding of the current situation. Finally, SWOT analysis is an indispensable tool for assessing risks before any major change in the business model. In this case, the SWOT analysis serves as a starting point in deciding on the appropriateness of the planned actions.
Reference
Gürel, E. (2017). SWOT analysis: A theoretical review. Journal of International Social Research, 10(51), 994–1006. Web.