Smart in 60 Seconds! Today: the SWOT Analysis

The SWOT analysis - short for: Analysis of Strenghts, Weaknesses, Opportunities and Threats – serves as an evaluation of your company compared to the competition. It is an important foundation for company and strategy planning. First the company is analysed compared to its environment; the results are summarised in a catalogue of opportunities and threats. This catalogue is then compared with a profile of strengths and weaknesses resulting from an internal company analysis.

Strengths are seen as competitive advantages - like low fixed costs and a high level of creativity. Weaknesses on the other hand are disadvantages compared to the competition like high costs or a lack of special knowledge. Opportunities are market developments that develop to the company’s benefit - for example, a change in consumer behaviour demanding new products or solutions. Threats are factors that could lead to problems for the company, for example, a change in the laws for an area in which the company is active.

The results from both analyses are then transferred into a matrix in order to be able to better illustrate and analyse the individual factors:

The matrix clearly shows that there are connections and dependencies between all parts of the SWOT analysis. For example, the combination of strengths and threats can be translated into the “hedge” strategy:  Action plans have to be developed here in order to limit threats (keyword: how could the company deal with the change in law XY).

With the help of agency software, the key data for an analysis of your company is always at hand.