SWOT analysis is a truly classic tool of strategic management. We are going to teach you the process of how to perform a step by step SWOT analysis.
Based on a simple concept, almost intuitive, the SWOT matrix allows you to schematically draw a four-square table where you list the strengths and weaknesses, opportunities and threats that can happen to a company. After doing this, the strategist must determine how each force can be leveraged into opportunities or protected against threats. Likewise, how and what weaknesses must be corrected so that opportunities are not lost or for threats not to affect the company’s results dramatically.
Does it seem easier said than done? Then read on to find out how to perform a step by step SWOT analysis and learn how to do it quickly and efficiently.
For more information, take a look at this: Business SWOT Analysis – What it is and how to use it in your company
How to perform SWOT analysis: step by step
Step 1 of SWOT analysis
Draw a table with four squares. Easy! That’s step 1 done!
Step 2 of SWOT analysis
Write on the left side of the table, on the first line: Internal Environment
Write on the left side of the table, on the second line: External Environment
Step 3 of SWOT analysis
Write in the upper left square: STRENGTHS
Write in the upper right square: WEAKNESSES
Write on the lower left square: OPPORTUNITIES
Write in the lower right square: THREATS
At this point, you’re well on your way to knowing how to perform a step by step SWOT analysis. Your SWOT matrix should be looking like this:
Step 4 of SWOT analysis
Well, as you noticed, strengths and weaknesses are considered internal factors of the company, they are not affected by outside interventions. Conversely, opportunities and threats are considered external factors, which you have no control over.
In step four you should list these factors within each corresponding square. For example: Let’s say you consider the training of your company strength, put that word in the corresponding square. Now imagine that the financial situation of your company is bad, then put this observation in the “WEAKNESSES” square. And keep listing weaknesses and strengths of your company.
After that, look outside the company. Let’s assume that an external factor, such as the warm weather is good for sales of your products: this is an opportunity! Write it down. On the other hand, the increase in import taxes of an important raw material was decided by the government: mark this as a threat in its square.
Note that weaknesses are different from threats: you do not control the threats. And the same goes for strengths and opportunities: opportunities are external, strengths are internal characteristics of your company, you can act on them.
Here comes the most complex stage, give plenty of attention to it before proceeding with it.
Step 5 of SWOT analysis
As we have explained, again and again, the company can only act on strengths and weaknesses. The ultimate goal of the SWOT Matrix is to determine exactly how best to utilize your strengths to maximize opportunities and get rid of threats. On the other hand, it serves to determine actions so that your weaknesses do not destroy the opportunities or, worst, become even more destructive threats.
Check out: How to improve efficiency in your business – Everything you need to know, right here:
Now that you know how to perform step by step SWOT analysis, you can act on your internal factors! A good strategy is to use a BPM software that can give your company efficiency, effectiveness, and continuous improvement.