Analysing the internal and external situation of a company is essential for the correct progress of the company, and thanks to the SWOT analysis it is possible to know the market situation of the companies, looking for solutions to the problems that are found.
Nowadays we can see how markets are in continuous evolution thanks to all the technological changes that occur, forcing companies to be constantly updated.
To strengthen the business, it is necessary to know the internal and external situation that it has. This will maximise the advantages that arise and minimise the impact of any problems or unforeseen events that may arise.
Within all this we find different tools and models that help to specify all this information, such as the SWOT analysis, which allows to know in depth the current situation of the company.
What is SWOT analysis?
The SWOT analysis is a technique that allows to analyse and put into context the situation of the company, being this an opportunity to make the most appropriate decisions and to undertake the right strategies.
The term SWOT comes from the words
- Weaknesses: the points of the market where the company is at a disadvantage, whether economic, competitive…
- Threats: we may have a position of power, but a change in trend, the appearance of a new competitor or any other element may cause us to lose our position.
- Strengths: knowing the company’s strong points is essential to be able to highlight them against the competition and in the eyes of customers.
- Opportunities: in all markets there are unexplored options or unsolved problems, we must look for these problems and offer a solution.
This technique is valid for both business plans and market studies, bringing to light the internal and external analysis of the company. This allows us to know the complete and real situation of our business.
Why conduct a SWOT analysis?
The SWOT analysis is a great tool that can be used in any company, regardless of brand or project. Every strategic plan must be based on some analysis, and the SWOT analysis will allow us to know the weaknesses and threats of the sector, as well as our strengths and opportunities in the market.
By means of this we will be able to know the global condition of the business, being interesting to establish parameters. Furthermore, knowing all this information will make it much easier for us to make decisions because we will be able to assess those that are most appropriate for the business objectives and strategies.
In this way, businesses can take full advantage of the internal and external qualities that arise and reduce the weaknesses and threats that they have to face, constantly working with values that help the business to progress.
Internal SWOT Analysis
If we focus on the internal analysis, we highlight the weaknesses and strengths of the company. Therefore, we must work to correct the weaknesses and promote the strengths, seeking solutions to the former and highlighting the latter.
In order to achieve all this, different variables are taken into account:
- Production
- Marketing,
- Organisation
- Human or personal resources
- Finance.
For production, it is necessary to analyse the company’s capacity to produce services and products, costs, quality and innovation. In terms of marketing, the product lines and ranges, the image offered to the public, positioning, market share, etc. are considered.
On the other hand, if we focus on the analysis of the organisation, we must study the structure of the company, the corporate culture, the hierarchy, the management and control process.
Finally, human resources must be studied to determine the personnel selection process, the training to be carried out, as well as the motivation policy, among others.
External SWOT analysis
Within the external SWOT analysis, we find the threats and opportunities, which surround the company and do not depend directly on it. These values must be taken into account because they are key when developing strategies.
The factors that influence the external analysis are:
- Market
- Sector
- Competition
- Environment.
The market is understood as the company’s audience, the evolution of demand, the desires of consumers and the behaviours they have when making a purchase.
On the other hand, the sector focuses on detecting trends that help to find new business opportunities, analysing suppliers, distributors, customers or manufacturers.
The study of the competition helps the company to situate itself on the map and to know how it is positioned in comparison with other companies.
Finally, the environment includes those elements that are alien to the organisation but that have a direct influence, such as economic, legislative, sociological, technological or political variables.
Logically, it is interesting for businesses to master all the information that affects them as a company, knowing the possibilities and opportunities they have, as well as the weaknesses that can negatively influence performance.
The SWOT analysis is a very positive model for the company to position itself within the sector and to be able to carry out the most appropriate strategies for its needs. SWOT analysis is essential for the business development of any company, not just large ones.
We hope that this article on SWOT analysis will be useful to you, resolving any previous doubts you may have had. However, we will be happy to answer any questions related to this topic.
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