Each business owner should regularly perform SWAT analysis to assess the strengths, weaknesses, opportunities and threats of companies related to competitors. SWAT analysis helps to assess the company’s position in the highly competitive market, and helps decision-makers formulate additional strategic plans needed to develop the company’s future roadmap. The importance of SWAT analysis(and its advantages) includes:
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SWAT analysis helps the organization understand the current situation, understand and measure the overall business results.
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SWAT analysis enables enterprises to analyze their own strength, thereby helping them better penetrate the market and achieve business goals.
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Through SWAT analysis, the organization can identify vulnerabilities and potential areas for improvement. This information helps to plan and mitigate future obstacles and ensure long-term business growth.
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With SWAT analysis, enterprises can formulate strategic plans to achieve expected goals and adapt to changing market conditions.
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SWAT analysis enables enterprises to understand and better identify internal and external factors as well as positive and negative impacts on enterprises. This information can help enterprises take appropriate actions in the dynamic market and maintain the trend, thus helping enterprises to take more proactive actions.
Small business owners must create products and services that meet customer value, and produce and deliver these products and services in a more specific way than their competitors. To address these challenges, you must define your current business and operational goals and consider the factors that affect them. The company will participate in structured think tank discussions supported by strength, weakness, opportunity and threat(SWAT) analysis. SWAT method has the following advantages: it is an ideal tool to solve various business problems and support brainstorming meetings. However, the shortcomings of this tool, such as the subjective analysis of a problem, are not ideal for others.
SWAT analysis has been used for decades. It provides a systematic market analysis method. When combined with other analysis tools such as PESTLE, it can reduce the risk of losing important information. There are too many things to consider, and it is easy to miss important things carelessly.
In conclusion, SWAT analysis is an important tool to understand the health of an organization. This allows decision-makers to understand not only the current situation of the organization, but also the areas that need to be improved. This allows them to become active players in the market while helping them remain competitive.
Use the following free list to start SWAT analysis:
List of SWAT analysis in 2022
“; s ‘is SWAT analysis – advantages(internal positive characteristics of the enterprise)
Marketing
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What is our company’s competitive advantage?
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What is our unique selling proposition?
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Do you have a monopoly relationship with suppliers or distributors?
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How big is our distribution network?
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What are the strengths of the marketing and sales teams?
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Do we have a famous brand?
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Are there purchasing customers and/or pre-sales representatives?
human resources
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Do our employees have the skills or expertise that competitors’ employees lack?
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Do our employees have professional certification or certification to our advantage?
assets
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Do you have any proprietary technology, intellectual property or other valuable proprietary information?
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Is there a prototype or proof of concept for market testing? Or have you implemented ideas based on pilot projects to test market/customer acceptability?
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Do we have any equipment or machines that our competitors do not have?
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Does our location or architecture give us a competitive advantage?
Financial resources
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What is the capital position of this company?
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If necessary, can we easily obtain additional costs?
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Are corporate profit margins and other financial indicators superior to industry standards?
“; w”; sWAT Analysis – Vulnerability(internal and negative attributes of the enterprise)
Marketing
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What complaints do we often hear from customers?
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What objections do potential customers often hear?
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Is there any restriction on the circulation of enterprises?
assets
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What are the weaknesses of the enterprise’s location or physical factory?
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Is the technology, equipment and machinery of the enterprise behind the times?
human resources
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Does the enterprise have enough personnel?
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Does the employee lack the technology or expertise required for competition?
Financial resources
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Does the enterprise have cash flow problems?
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Are the profit margins and other financial indicators lower than those of competitors?
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Does the company have excessive debt?
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Is it difficult for enterprises to obtain additional capital?
; in “O”; sWAT analysis – Opportunities(external positive factors that help the business)
Competitive environment
- Does the competitor’s weakness help the business
market environment
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Is the change of target market beneficial to the enterprise?
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Is there a potential niche market that has been overlooked?
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What are the requirements of customers and customers that the enterprise did not provide, but can they be supplemented?
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Does the enterprise have the opportunity to carry out regional, regional or national activities?
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What regional expansion opportunities exist?
economic environment
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How do current and predicted economic trends bring opportunities to enterprises?(i.e. housing price, employment rate, consumer confidence)
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What changes are taking place in this industry that can create opportunities?
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Are there any potential new sources of financing that can help the enterprise?
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Will expected changes in interest rates, tax laws or banking regulations benefit the enterprise?
Political environment
- How the proposed changes to local, local, national, regional or nearby governments have a positive impact on the business
Technical environment
- How the predicted technological progress will create opportunities for enterprises
In “; t”; sWAT analysis – threats(external and negative factors that may cause damage to the business)
Competitive environment
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Does your competitor plan to make other changes to expand, introduce new products or services, or harm the business?
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Now it is not a direct competitor, but is there any enterprise that can become a competitor in the future?
market environment
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Is our target market shrinking?
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Will the predicted social changes have a negative impact on the demand for our products?
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Is the enterprise overly dependent on key customers?
economic environment
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How will the current and projected economic trends(i.e. housing prices, employment rates, consumer confidence) negatively affect businesses?
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What predicted industry trends will harm the business?
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Will changes in external financial factors(such as revised loan standards, increased capital costs or higher interest rates) harm the business?
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Will the expected increase in operating costs(i.e. rent, wages, inventory, utilities) harm the business?
Political environment
- Whether changes in local, state and national governments(such as restrictions or new trade agreements) will have a negative impact on business
Technical environment
- Predicted negative impact of technological progress on business
Bonus!
What are the advantages and disadvantages of SWAT analysis? See the following list:
Advantages: problem domain
SWAT analysis can be applied to organizations, organizational units, individuals or teams. You can also support many project goals. For example, SWAT can be used for product or brand evaluation, acquisition or cooperation, or outsourcing business functions. In addition, SWAT analysis helps to evaluate the implementation of specific sources, business processes, product markets, or specific technologies.
Advantage: Application neutrality
SWAT analysis refers to the identification of internal and external factors that are conducive to achieving goals and negative, and the identification of goals and objectives through brainstorming meetings. Whether you support strategic planning, opportunity analysis, competitive product analysis, business development, or product development processes, these methods will not change.
Advantages: multi-level analysis
You can view one of the four elements of SWAT analysis(strengths, weaknesses, opportunities, and threats) individually or in groups to obtain valuable information about the target opportunity. For example, threats to the identified business environment, such as new product design or new government regulations on the introduction of competitive products, may remind business owners to evaluate the proposed investment in new manufacturing lines in more detail.
In addition, recognizing a company’s weaknesses, such as a lack of qualified staff, may mean considering outsourcing specific functions. On the contrary, providing entrepreneurial enterprises with opportunities such as low interest loans can encourage entrepreneurs to develop new products to meet growing customer demand. In contrast, the exact advantages such as rich experience in industries experiencing rapid international growth may indicate the need to cooperate with foreign companies.
Advantages: data integration
SWAT analysis needs to combine quantitative and qualitative information from multiple sources. A range of data from multiple sources can help improve enterprise level planning and decision-making, enhance decision-making, and improve communication and business coordination.
Advantages: simple
SWAT analysis does not require technology or training. On the contrary, the relevant business and anyone who knows the industry can execute it. This course includes brainstorming sessions that help discuss the four aspects of SWAT analysis. Therefore, the beliefs and judgments of individual participants are aggregated by collective judgment and recognized by the whole collective. In this way, everyone’s knowledge becomes collective knowledge.
Advantages: Cost
SWAT analysis does not require technology or training, so you can choose employees to conduct the analysis instead of hiring external consultants. In addition, SWAT is a relatively simple method that can be completed in a relatively short time.
Disadvantages: no weight coefficient
SWAT will analyze four separate lists of strengths, weaknesses, opportunities and threats. However, the tool does not provide a mechanism to sort the importance of one element and another in the list. Therefore, it is difficult to determine which factor really affects the goal.
Disadvantages: ambiguous
SWAT analysis creates a one-dimensional model that categorizes each problem attribute into strengths, weaknesses, opportunities, or threats. Therefore, each attribute has only one impact on the analyzed problem. But one factor may be strengths and weaknesses. For example, opening a chain store on a street with convenient transportation is convenient for customers, which may be reflected in the increase in sales. However, it is difficult to compete on the price of facilities with high operational visibility without large sales volume.
Disadvantages: subjective analysis
To have a significant impact on business performance, you must make business decisions based on reliable, relevant, and comparable data. However, SWAT data collection and analysis requires a subjective process to reflect the personal bias of collecting data and participating in think tank meetings. In addition, data input for SWAT analysis may soon expire.
