The SWOT analysis provides a frame of reference for each component of the company and the sector in which it participates to understand its current position. It is important to clarify that a SWOT analysis (also called SWOT) describes the general state of a company during a certain period because the conditions of its own and those of others in the market change frequently.
What Is A SWOT?
It is an evaluation process in which the internal and external factors that intervene in a company are considered. Observe each weakness, threat, strength and opportunity of the organization to make the decisions that will define the business strategy.
Four Elements Of The SWOT
- Weaknesses: it points to the internal factors that make a company vulnerable, whether it is a bad organization, certain tasks executed in an inefficient way or processes that simply do not perform, among others. It is everything that reduces competitiveness.
- Threats: refers to external aspects, that is, the negative environment in which a company finds itself, which cannot be controlled: competitors, the economic, fiscal, political and legislative situation.
- Strengths: represents all the correct functions and good use of a company’s internal resources. It includes the capacities and abilities of the personnel, its infrastructure, technology and organization.
- Opportunities: are external situations that favour the company even though they are not under its control. They represent a technological, social, and cultural advantage, a market trend that offers the possibility of positioning its growth.
You have to try to work on your weaknesses to turn them into strengths because if you cannot do it and the external threats continue, it is best that you explore new opportunities in different markets.
Now that you know what the SWOT analysis is, what it is for, and how you can apply it in your company to understand your current situation fully, we encourage you to start using this valuable tool as soon as possible.