In this article we describe the SWOT analysis, a much used aid in corporate life in determining the business strategy.
In this article you can expect:
What is the SWOT Analysis?
The SWOT Analysis is a much used aid in corporate life in determining the business strategy. It is an essential component of the strategic policy determination process and must also be included in the strategic marketing plan. Another name for SWOT Analysis is the TOWS Analysis.
A SWOT Analysis is an important component of a marketing plan because it is the link between the research and the choosing of strategy. After it gets mapped out from the internal and external environment in the Situation Analysis, the output from here serves as input for the SWOT. From the opportunities, threats, strengths and weaknesses strategic options are formulated. After that, the various strategic options are evaluated and a choice must be made.
How does the SWOT Analysis look like?
- Strengths - the strong points of an organisation itself (Internal)
- Weaknesses - the weak points of an organisation (Internal)
- Opportunities - the opportunities for an organisation (External)
- Threats - the threats to an organisation (External)
How do I conduct SWOT Analysis?
Step 1 - Selection
First, a selection must be made from the findings from the Situation Analysis. The relevance and potential for possible new activities are the most important selection criteria.
Step 2 - Combination
In this stage, combinations must be made from strengths/weaknesses and opportunities/threats. These are the potential strategies. A SWOT Matrix can be made. In the table below, different combinations that result in different strategies are given there. More about it in the Confrontation Matrix.
Step 3 - Strategic options
From all potential strategies, a select few are chosen. These are the strategic options that should be thoroughly weighed. It is inadvisable to hold only a limited number!
Stap 4 - Preferred Strategic Option
Here the ultimate choice must be made. It is important to extensively research which strategic option shall become the best strategy. Make this also insightful for the reader. Describe the reason for the choices made and possibly even the reason other options are discarded. It can always be such that the ultimate decision maker sees something more in another option.
When choosing, three factors must be paid attention to.
- Does the strategy offer a solution for the core problem? If the chosen strategy only offers a solution for a sub-problem, then the solution offered is not suitable. A choice must be made for a solution of the overall big problem.
- Is the strategy doable? It is of course of no use to choose a non-viable strategy. Therefore, the option must be tested on the FOETSJE principle. LINK: FOETSJE
- Acceptability Is the plan acceptable for personnel, clients, government, locals, worker’s union etc.?
If a strategy has gone through all these steps, it is time for work on the rest of the marketing plan.