SWOT analysis is one of the main tools in support of Strategic Planning. With that in mind, we decided to talk more about how to use SWOT Analysis to start doing your Strategic Planning.
What is SWOT Analysis?
SWOT analysis is a management tool created decades ago and used until today for you to analyze the external and internal environments that your company finds. With it you raise the Forces and Weaknesses (internal environment) and the Opportunities and Threats (external environment) that affect your business.
How to do a SWOT Analysis?
To get started you need to list all the strengths and weaknesses of the company. You can brainstorm with your team to list all of these options. One technique that can help you analyze better is to score strengths and weaknesses to find out which ones are the most important and the least important ones. When using our Ready Worksheet, you already have some suggestions of strengths and weaknesses that can be changed according to your reality. Also, it also assists with punctuation by making this process automatically. But you can also make your Worksheet for personal control. Once you understand your inner environment, it is time to look outside and analyze the external environment. For this, you should list all the Threats and Opportunities external to your business that in any way can affect your company. Once you have lifted all your Strengths, Weaknesses, Opportunities, and Threats, it’s time to begin crossing those data and begin your Strategic Planning.
Crossing SWOT Analysis data
There are 4 types of strategies based on crosses. They are:
Forces x Opportunities
In this first type of crossing, you evaluate how you can make the most of what your company has of the strongest to make the most of the opportunities that the external environment is offering you. The idea here is to think of the best possibility of using force to take advantage of an option, so try to associate an effect with only one of the opportunities, so it is possible to have more focus and objectivity in actions.
Forces x Threats
In a second moment, you begin to cross the data between the Forces and the Threats of a company, to make better use of what you have in your business to neutralize possible negative influences coming from the external factor. Weaknesses x Opportunities Crossing your gaps with Opportunities is time to mitigate the influence of your shortcomings on market opportunities. At this stage, you must design strategies to minimize your company’s weaknesses so that they can boost chances by understanding these strategies as reinforcement strategies.
Weaknesses x Threats
Here you will think of strategies to minimize losses and adverse effects of your weaknesses and threats to your company. The so-called defense strategies are precisely for the manager to think of ways to mitigate the impact of this negative quadrant in the results.
Understanding Your Business Phase with SWOT Analysis
After crossing your SWOT, some new possible strategies have already been defined. But you can take more advantage of your SWOT Analysis by using it to discover your Business Phase
In the survival phase, your company is faced with weaknesses and threats as predominant. This is not a favorable picture for your business so be careful if you are in that quadrant. If your Threats are potentializing your Weaknesses, be careful and strategize to get out of this situation. Remember that your Weaknesses are under your control so try to lessen their influence first, but do not forget to think of ways to reduce the effects of External Threats.
It is the scenario where your Forces and Threats are the most relevant. In that case, care must be taken that your Forces do not lose their importance. Think of strategies that somehow diminish the negative impact of threats on your Forces and also use your Forces to counteract possible threats whenever possible.
Scenario where the ideal time is to focus on growth. Since your weaknesses and opportunities are the most relevant, focus on making the most of opportunities, and since weaknesses are internal factors controlled by you, think of strategies to counteract or turn those weaknesses into strengths.
More positive scenario possible where your strengths and opportunities are the most relevant. Do not miss out on this good time and focus on making the most of these opportunities and continue developing your strengths. Think of strategies you can maintain at this positive pace and make the most of the positive potential of the Opportunities offered by the market.
- The most fabulous job of the Manager is knowing how to prioritize what should be the focus of the work. Use SWOT analysis to find out what will be the company’s most significant focus: whether internal or external.
- SWOT Analysis is one of the tools of a Strategic Planning so when it comes to planning the future always try to take a look at your data and crosses to see possible insights that can help you.
- As with Strategic Planning, SWOT Analysis can be revisited and redone after some time. Whenever possible, try to update it with new information from the environment.
- This post was written using our SWOT Analysis Worksheet. With this Worksheet, you can cross-check the data and automatically calculate your business phase with comments on how you can best use it.