Definition and examples of SWOT Analysis – SWOT stands for Strength, Weakness, Opportunities, and Threats. As the name suggests, SWOT Analysis is strategic planning techniques that are useful for evaluating Strength (Strength) and weakness (Weakness), opportunities (Opportunities) and threats (Threats) in a project, either an ongoing project or in new projects. SWOT analysis can not only be used in business but can also be used on our own personal in career development.
SWOT analysis was first introduced by Albert S Humphrey in the 1960s in leading research projects at the Stanford Research Institute that used data from Fortune 500 companies.
4 Basic Components of SWOT Analysis
SWOT analysis consists of 4 basic components, namely:
- Strength ( abbreviated ) or abbreviated as “S”, namely the characteristics of the organization or project that gives advantages/benefits compared to the others.
- Weakness (Weakness) or abbreviated as “W”, the characteristics associated with the weakness of the organization or project than others.
- Opportunities ( abbreviated as “O”, i.e. Opportunities that can be used for organizations or projects to be able to develop in the future.
- Threats (Threats) or abbreviated as “T”, namely the threat to be faced by the organization or project that could hinder its development.
Of the four basic components, Strength ( S) and Weakness (W) are internal factors of the organization/project itself, while Opportunities (0) and Threats (T) are external factors that affect the development of the organization or project. Therefore, SWOT Analysis is also often referred to as Internal-External Analysis (Internal-External Analysis) and SWOT Matrix is also often known as IE Matrix (IE Matrix).
How to use SWOT analysis
To do a SWOT Analysis, we need to make a number of questions and answer them ourselves like the following examples:
- What advantages does the organization have?
- What makes an organization better than other organizations?
- What is unique about the organization?
- What causes us to get sales?
- What do our consumers see or feel like an advantage?
- What can be improved in the organization?
- What should the organization avoid?
- What factors cause lost sales?
- What do our consumers see or feel as a weakness of our organization?
- What do competitors do so they can be better than our organization?
- What opportunities can we see?
- What development trends are in line with our organization?
- What obstacles do we face now?
- What does the competitor of the organization do?
- What technological developments are causing threats to organizations?
- Are there changes in government regulations that will threaten the development of the organization?
Factors Affecting SWOT Analysis
The factors that affect the four basic components of SWOT Analysis include:
Internal Factors ( Strength and Weakness )
- Resources owned
- Financial or financial
- Internal strengths or weaknesses of the organization
- Previous organizational experiences (both successful and unsuccessful)
External Factors ( Opportunities and Threats )
- Culture, Social Politics, Ideology, Economy
- Capital sources
- Government regulations
- Technological development
- Events that occur
Example of SWOT Analysis
The following is a simple example in conducting a SWOT Analysis in evaluating a company’s Strengths, Weaknesses, Opportunities and Threats.
- We can respond quickly to any customer request without having to go through a long bureaucracy.
- We have low overhead costs, so we can offer the best price for our customers.
- We pay close attention to each customer’s requests and needs.
- We are very flexible in handling every case and customer request.
- We have a good reputation in the determined market.
- Our staff still has low ability in certain fields.
- Our company has limitations in capital.
- Cash flow sometimes is not smooth.
- Office locations are located in less strategic places.
- The sector that we are persevering is experiencing an increase
- The government strongly supports local companies like us
- The rapid development of technology in this market that is beyond our capacity will cause us to be late in adopting it.
- Changes in competitors’ strategies can threaten our position in the market.
- Lack of interest in banks in financing funding for the industry that we are currently engaged in.