What is SWOT?
Introducing SWOT analysis
The SWOT analysis was first proposed in 1950 by two Harvard Business School graduates, George Albert Smith and Roland Christensen. At that time, this analysis, while gaining increasing success, was recognized as a useful management tool. But perhaps the most obvious success of this analysis came when Jack Welch of General Electric used it in 1980 to examine GE strategies and increase the productivity of his organization.
SWOT is the term for Strengths, Weaknesses, Opportunities and Threats. The first step in the strategic planning process is to determine the mission, goals and missions of the organization, and then through SWOT analysis, which is one of It is a strategy formulation tool, designed for the organization to fit the environment. Using this analysis, it is possible to firstly analyze the internal and external environments and secondly make strategic decisions that balance the strengths of the organization with environmental opportunities.
SWOT is in fact a tool that is commonly used to put together analytical findings of external pressures and internal capabilities and to analyze strengths, weaknesses, opportunities and threats that requires identifying strengths, and area weaknesses, opportunities and threats based on Predicted environmental trends are presented. This method is used to analyze the current situation and examine the strengths, weaknesses, opportunities and threats in order to identify strategic issues and provide a suitable strategy in the long run for an area.
Definitions of strengths and weaknesses and opportunities and threats
Strengths: It is the superior competence by which the organization can be superior to competitors in areas such as the type of financial resources, positive mental image among buyers, positive relationships with suppliers and the like.
Disadvantage: The type of limitation or lack of resources, skills and facilities and abilities that significantly impede the effective performance of the organization. Management performance is also effective in exacerbating weaknesses.
Opportunity: It is a major desired success in the external environment of the organization, such as recognizing a part of the market that was previously forgotten. Changes in competition or rules and improve relationships with buyers and sellers
Threat: A threat to adverse success in the external environment of the organization, such as the bargaining power of key buyers or suppliers, major and sudden changes in technology, and cases that can be a major threat to the success of the organization.
Rules governing the SWOT analytical matrix
– How to make the most of opportunities by exploiting strengths (SO)
– How to eliminate or reduce the effect of threats by using strengths (ST)
– How to take advantage of opportunities to turn weaknesses into strengths or reduce the severity of weaknesses (WO)
– How to reduce the impact of threats or eliminate their impact by reducing weaknesses. () WT
In short, the purpose of analyzing the opportunities and threats of the external environment is to assess whether a company can seize the opportunities and avoid the threats. Especially when faced with an uncontrollable external environment at the present time
Steps to perform SWOT analysis
1- Forming a meeting? SWOT analysis
2- Brief explanation of the purpose of the meeting and the steps of doing the work
3- Using the brainstorming method to identify strengths and weaknesses and opportunities and threats
4- Prioritizing internal and external factors
5- Forming the SWOT matrix and entering the selected factors according to the prioritization
6- Comparing internal and external factors with each other and determining SO, WO, ST, WT strategies
7- Determining the necessary measures to carry out the specified strategies
8- Performing actions and reviewing their results
9- Updating the SWOT matrix at appropriate intervals
How to analyze W.O.T to formulate strategies
After gathering information about four factors (strengths, weaknesses, opportunities and threats), this information is used to obtain strategies during the following steps:
Step 1: Assess the environment – Consider a football coach Before the game, the coach has developed strategies for leading his team, but when the game starts, he has to make changes in the game according to the game process and the conditions of the players. Give your strategies.
Step 2: Identify strengths and weaknesses or opportunities and threats
Step 3: Consider the above factors together to determine strategies as follows:
So strategies (strengths and opportunities should be considered together)
ST Strategies (Consider Strengths and Threats)
– WO strategies (consider weaknesses and opportunities together)
-WT Strategies (Consider Weaknesses and Threats)
Step 4: Evaluate different strategies: At the end of the step of considering the two primary factors to determine strategies, a large number of strategies are developed. At this stage, review and review these strategies to select those that are more in line with the goals of the organization.
Step 5: Select the optimal strategies: In this step, a long list of strategies is available. Many strategies are not practical to implement, so it is important to turn this list into a shorter list of strategies that can be implemented in discussion sessions.