SWOT is the acronym for Strengths, Weaknesses, Opportunities and Threats.
SWOT is an acronym formed from the terms “strengths” , “opportunities” , “weaknesses” and “threats” . The study that allows us to know these characteristics of a company or a project , detailing them in a square matrix , is called a SWOT analysis .
The American engineer Albert S. Humphrey is noted as the creator of SWOT analysis, also known as SWOT analysis or SWOT and, in English, as SWOT analysis . In the 1970s , this business consultant and other members of the team of a research institute, based on numerous interviews with executives, concluded that entities have strengths in the present and favorable opportunities for the future, just as current weaknesses and threats in the future .
Development of a SWOT analysis
The SWOT analysis, therefore, provides information about the situation of a company and allows a strategy to be drawn up with steps to follow according to the information obtained from its internal characteristics and context.
To carry out this type of process, you must first carry out an internal analysis and an external analysis of the institution in question. With these data, the SWOT matrix is created. This matrix then serves as a starting point to determine what strategies will be implemented.
The SWOT analysis provides information about the situation of a company and contributes to the design of strategies.
Issues to consider
Specifically, when carrying out a SWOT or FADO analysis, it is important to take into consideration a series of relevant aspects:
-It has to offer a general analysis of the entire company.
-It is necessary, in the same way, that it be concrete, simple and personalized.
-No less relevant is that it is essential that those in charge of carrying it out have a preparation time where they can collect all the information they need and that is important.
-You must avoid at all times raising what are abstract concepts.
-It has to be the starting point of a new direction or path in the company, therefore, it must perfectly analyze the real situation in which it finds itself.
-It is essential that it be supported by carrying out various analyzes to verify the evolution of the company in question.
-In the same way, it is essential to thoroughly review what the conclusions are.
Usefulness of SWOT analysis
If strengths and opportunities are combined, it is possible to discover the company's potential , which suggests the path to follow. By combining weaknesses and threats, meanwhile, you access the limitations of the signature, which constitute a warning about what must be corrected or avoided. The combination of strengths and threats constitute risks , while the combination of weaknesses and opportunities constitute challenges .
Exactly, once the aforementioned SWOT analysis has been carried out in the company in question, strategies will be able to be developed and implemented, which can be of various types:
-Defensive strategies, which are those obtained by adding strengths and threats. And they are based on counteracting what may be external threats with the company's strengths.
-Offensive strategies, which are the result of adding strengths and opportunities. What is done in this case is to add external strengths with other internal strengths of the company.