SWOT: abbreviation deciphering, analysis, strengths and weaknesses

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Each organization, aimed at long-term existence in the market, must take into account in its activities such an important point as planning. However, as you know, all plans should be based on a preliminary analysis and on the definition of the main directions of development.

There are many methods for analyzing the activities of an enterprise. But there is one that professional managers have especially fallen in love with lately - this is SWOT analysis, the decoding of which consists in combining the first letters of four English words into an abbreviation. The article below will reveal the essence of the name of this technique and talk about its main features.

SWOT: transcript

The whole essence of this method of strategic research of the company's activities lies in its very name. In its name, this method has collected four English words - strengths, weaknesses, opportunities, threats. Each word is responsible for a specific part of the analysis.

Thus, the first word strengths in translation means "strengths". Howas a rule, the research studies first of all those aspects that are the driving force for the organization.

The second word is weaknesses, which means “weaknesses” in translation. After identifying the strengths, the analysis manager determines what weaknesses a particular company has.

The third word is opportunity, translated from English means "opportunity". At this stage of the study, opportunities are identified that the company can take advantage of to achieve success or maintain itself within profitability.

The fourth word is threats, which means “threats” in translation. Threat research identifies major risks to the organization and develops plans to prevent them or deal with them if they occur.

Thus, the SWOT decoding speaks for itself and already from this definition it becomes clear that such an analysis is carried out in four stages, and then, based on the results obtained, specific action plans are drawn up for the company.

Goals and objectives

It is worth dwelling separately on the goals and objectives of the SWOT analysis of the strengths and weaknesses of the organization. The main goal is to determine the degree of development and develop an action plan to achieve the target level. The moment of analysis is a kind of starting point to a given goal, which determines the company's place in the current market for the sale of goods and services. The main task of this analysis is to determine the relationship between the strongest and weakest sidesfirms.

Types of analysis

There are three main types of this analysis:

• express;
• summary;
• mixed.

It is necessary to elaborate on each of these species. Express analysis is usually the most popular option, which helps to quickly and easily study the strengths (strengths) and weaknesses (weaknesses) of the organization. The difference of this type from others is that here the focus is on the study of strengths and weaknesses, as fundamental factors for the success of the company.

Summary analysis is a study that allows, based on the main indicators that determine performance, to develop the most optimal course that a company needs to follow, based on its development prospects.

Mixed is a type of research that combines the two previous ones and lies in the fact that with the help of it you can determine the competitiveness of the company and outline a clear action plan to achieve the desired goals. This type of analysis gives the most accurate results of the study.

Key aspects

It is always worth remembering that SWOT analysis is used in order to be able to carry out strategic planning for the development of an organization or its constituent parts. Such an analysis should be focused on how to use the available opportunities as efficiently as possible and attract the necessary resources in time to prevent them in a timely manner.influence of negative external factors and threats.

In order for the developed strategies, taking into account SWOT, to really be implemented, the study uses such matrices, which are called the Balanced Scorecard. This tool allows you to identify which areas of the company's strategic development are fundamental.

All data is summarized and recorded in a SWOT matrix, which allows you to visually display the factors of analysis. However, its disadvantage is that it is difficult to determine additional information from it. For example, in cell W (weaknesses - translation "weaknesses") the fact of turnover of professional personnel is indicated, but this is only a fact, not supported by a detailed study and determination of the cause. Therefore, managers are encouraged to use additional tools for analysis and thus form additional reinforcement in the form of calculations dedicated to each factor.

This analysis is very useful for competitive intelligence. As a rule, the probability of obtaining reliable information about competitors with this method is more than 50%.

Pros of SWOT analysis

After understanding SWOT and the essence of this method, you should determine its advantages and disadvantages. Highlight such advantages as:

1. Ease of holding. Such an analysis can be handled by both an experienced manager and any other specialist who has the opportunity to obtain basic data about the company.
2. The analysis establishes clear links between the company, its capabilities andproblems.
3. You don't need to collect extensive data to identify key points in a SWOT analysis.
4. Such research can reveal a company's profitability and compare with competing firms.
5. This analysis allows you to focus on the weaknesses of the firm.
6. Analysis prevents hazards that could harm the firm from its environment.

Cons of SWOT analysis

Any management tool and method has not only positive aspects, but also negative ones. Therefore, based on the minuses, it is necessary to determine the appropriateness of using this method of analysis in a particular situation.

The following series of disadvantages of this study are highlighted:

1. There is no temporal dynamics in such an analysis. The market situation changes regularly and rapidly. Therefore, when choosing this analysis technique, it is important to take into account that it will not be able to fully warn about changes in the external environment.
2. The study does not take into account evaluative and quantitative evidence, which reduces information to a minimum.
3. Often, due to the inexperience of the manager, subjective indicators are displayed in such an analysis.

When should I do this analysis?

It is imperative to conduct such an analysis if there is a need to create a general picture of what is happening in the enterprise or organization or to collect specific facts that can subsequently serve as the basis for a more in-depthresearch. This can serve as an initial directory of coverage of all issues. It is worth noting that such a rough checklist of the main factors can be drawn up even before negotiations or meetings with business partners, which will help determine the feasibility of cooperation.

You should not use such an analysis tool if the company needs information about dynamic changes or when studying the external environment to develop long-term plans. It is always worth remembering that SWOT analysis shows the picture of reality and can only be part of long-term planning. In addition, it must be taken into account that such a research method is a way of obtaining only fragmentary and static information.

Conclusion

Summarizing, it is worth noting that a SWOT analysis is a great way to quickly assess the current state of a company and take into account all O (opportunity - translated as “opportunity”). Based on this, the company can determine the effectiveness of a given course of action. Ultimately, knowing about all the factors T (threats - in the translation of "threats"), you can not only foresee problems and risks, but use them to your advantage.