If you just started learning business, marketing, or management, then you will have to make numerous analyses. One of the most common ones is SWOT analysis. It is different from comparative, opinion, or any other type of essays. It has its structure and requirements. We will explain all its elements, structure, writing process, as well as provide examples in this article.
What is SWOT analysis and its purpose
SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats. It is usually applied to analyze businesses, cases, individual projects, or even a person and is often presented in the form of diagram or matrix. It presupposes analysing internal and external positive as well as negative factors to determine the project’s current state and identify opportunities for further research. Professors often ask students to conduct SWOT analysis for Business, Marketing, or Management classes. You can also conduct a personal SWOT analysis.
Benefits of the analysis
SWOT analysis is a widespread tool as it has numerous advantages:
- Its clear and simple
- Helps understand the company or project better
- Helps identify strengths, weaknesses, opportunities, and threats
- Serves as a basis for further research
- Allows to take advantage of strengths and improve the weak points
- Helps identify future goals
Despite its numerous benefits, SWOT analysis is not a perfect tool. It will not fit everyone, as the analysis has its limitations:
- It does not prioritize identified issues
- Does not help to choose the most pertinent options
- Not all the information obtained is relevant
- Helps analyze but does not offer solutions
- Factors identified are often just an opinion, but are not underpinned by facts
- The division into strengths and weaknesses, strengths and opportunities of often subjective
How to do a SWOT analysis
Conducting a SWOT analysis is easy, and a basic one can be performed just in four steps. However, before conducting an analysis, you should understand its components, peculiarities, and what should be done at every stage.
Components of the analysis
As can be seen from the acronym, the analysis consists of four components; namely, strengths, weaknesses, opportunities, and threats. Let’s find out what each element should cover.
This part of the analysis describes positive aspects of your company and what you do well. It is what distinguishes you from the competitors and helps you stand above the rest. These can be internal resources and tangible assets. Please consider that only those aspects that actually bring you benefits and advantages are considered strengths.
After strengths, you should consider the weaknesses. These are internal aspects and elements that your company or project lacks or somethings that your competitors do better than you. It is important to be objective at this point.
Opportunities are the external factors that can help you perform better. To identify them, you should be well versed in your product or services and market specifics, be aware of your competitors. These are aspects that can help your company perform better.
These are external factors that can negatively affect the performance of your company or project. Usually, the company cannot change these situations, but it is important to know them and be ready. For example, it can be negative media coverage, supply chain issues, or changes in market performance.
How to do a SWOT analysis of a company
Conducting an analysis is a simple process. Actually, you should identify the subject’s strengths, weaknesses, opportunities, and threats. However, there are additional prewriting steps as well as steps that can be taken after the analysis. For example, a professor can ask you to choose the main issue of the company and create an implementation plan. It is not a mandatory step. Thus, you should always check the instructions attentively, and clarify all the unclear points with your professor. Regarding the formatting style, it can be different, either MLA, APA, Harvard. Anyway, you should check the instructions.
It can be presented in a form of a diagram or matrix. If you will need to present your analysis, we recommend creating a matrix with the main points of your analysis and writing an extended analysis with explanations in a form of essay.
1. Choose the objective
The first step in conducting an analysis is choosing your objective. If the project was assigned by a professor, it’s great. But, if not, you will need to take your time to choose the project, case, or a company that is interesting for you and relevant to your class.
2. Conduct research on the issue to collect data
The next step is making a research on your subject. First of all, it is necessary for you to find out whether there is enough information for your analysis. If there is no information available, it is better to change the subject. If there is enough data, collect and write it down to conduct an analysis.
3. List strengths
The first step of actual analysis is identifying and listing the strengths of the company. To do this, you can answer the questions:
- What is it that you do well?
- What is your unique selling proposition?
- What are your unique assets and physical assets?
- Why do your customers choose and value your company?
- What makes you stand out from the rest?
After answering these questions, you will understand what you are good at. It means that you should keep on doing it.
4. List weaknesses
Answering questions can also help you identify your weaknesses. Try these ones:
- What do you think you could do better?
- What areas or business processes need to be improved?
- Are there any gaps in your resources?
- Do you need more specialists?
- What do customers dislike about your company, product, or services?
- What are the advantages of your competitors?
- Are there any resources available to you competitors which you do not have?
- What obstacles do you currently face in reaching your objectives?
After identifying all the factors, you should look through them and understand that these are your areas of underperformance that can be changed into your strengths.
5. List opportunities
Opportunities are the factors that can help you improve and perform better. They are always subject-specific and external factors, thus might be difficult to identify.
- What opportunities are currently present in your field that you can use and benefit from?
- How can you use your strengths and weaknesses to your advantage?
- What are the current trends you can take advantage of?
- What recommendations of customers can you implement?
- What else can you do to improve your performance?
- How can you improve the already existing processes?
- What additional processes can be introduced to improve your performance?
6. List threats
Threats are external factors that you have no control over. That is why predicting them and creating strategies for every case is important. You can identify your threats by answering such questions:
- Are there current trends that can negatively affect your performance?
- Can the emergence of new competitors hinder your performance?
- What threats can you face due to your weaknesses?
- Can change consumer behaviour negatively impact you?
- Are technological developments a threat to your performance?
7. Establish the main issue
This is not a mandatory step. But some professors ask to do it. The task is to identify the most urgent issues that need to be addressed or the one that should be considered because it can hinder your future performance. The point is that you should be able to identify the issue that the most negatively affects the performance of your project.
8. Create an implementation plan or strategies based on your analysis
The last step is creating an action plan. After you have identified your weak sides and areas for improvement, you should make up a plan and make up strategies that will help you eliminate those issues and make you better.
How to do a personal SWOT analysis
Conducting a personal SWOT analysis does not differ a lot from a company analysis. The process, stages, and elements of the analysis are the same. You should identify your own strengths, weaknesses, opportunities, and threats. The difference is that you should evaluate your personal character features, not a market or industry. The main difficulty is that it might be difficult to stay cold-headed and analyze yourself objectively.
You should also consider one more thing. Although it is a personal analysis you should establish the area and basis for your analysis. What we mean is that if you want to analyze yourself as a student, you should compare yourself to other students and ask questions that are related to this sphere of life. If you want to evaluate yourself as a student but compare yourself with businessmen, then this analysis would be irrelevant and not valid.
SWOT analysis internal (strengths and weaknesses) and external (opportunities and strengths) factors. If there is a need to analyze external factors in detail, then SWOT is conducted together with PEST analysis, also known as PESTLE. It is an analysis of such external factors as Political, Economic, Social, and Technological factors.
- Political factors: trade and labor laws, environmental issues, policies and human rights, wars and conflicts
- Economic factors: GDP and Per capita, domestic economy situation, taxation issues, specific industry factors, unemployment rate, inflation rate
- Social factors: demographics, lifestyle trends, ethical issues, consumer buying behavior, education, social culture
- Technological factors: innovation, technological development, research & development, intellectual property issues, information and communication.