The SWOT analysis enables you to pinpoint the strengths, weaknesses, opportunities, and threats surrounding your business or a specific project. You’ll utilize this strategic tool to identify actionable steps to grow your business while enhancing its competitiveness.
It’s an ideal tool for making informed decisions and fostering business growth!
What is the SWOT tool?
SWOT is an acronym for strengths, weaknesses, opportunities, and threats. In French, it translates to forces, faiblesses, opportunités, and menaces, sometimes referred to as FFOM!
It’s one of the primary analysis tools used to make important strategic decisions and expand one’s business.
In a single matrix, the SWOT analysis diagnoses the entirety of the company’s ecosystem:
- Its external environment (opportunities and threats)
- Its internal context (strengths and weaknesses)
To conduct your SWOT and explore your business’s growth potential, you’ll ask yourself a series of questions:
- Strengths: What are your strong points and competitive advantages?
- Weaknesses: What are the weaknesses of your organization?
- Opportunities: What opportunities (trends, habits, laws, technologies) can you leverage?
- Threats: What are the threats (dangers) that could impact your business’s performance?
What is the objective of a SWOT analysis?
The objective of a SWOT analysis is to assess whether the company possesses the strategic capabilities necessary to adapt to changes in its environment.
The SWOT analysis is used to determine the opportunities available to your company and, above all, the threats it faces, for example, when it comes to:
- Launching a new product or service
- Expanding or enriching an offering
- Improving a service
- Making investments
- Expanding its presence
- Merging or partnering
- Discontinuing the commercialization of a product
- Assessing its competitiveness
Ultimately, once the SWOT analysis is completed, you will be able to identify the actions to be taken or the development choices to maintain your company’s performance, identify the problems that need to be addressed quickly, highlight opportunities, or determine priority projects.
How to conduct a SWOT analysis?
The SWOT analysis takes the form of a table consisting of 4 sections to be filled in and is carried out in 3 phases:
- Analysis of the internal environment: strengths and weaknesses
- Analysis of the external environment: opportunities and threats
- Definition of corrective measures and implementation of a prioritized action plan
You will conduct this diagnosis, either alone or with your team, by recording on the matrix all the strategic elements concerning internal or external factors.
- Analysis of the internal environment
This is related to the strengths and weaknesses of your organization, services, or products. Since these elements are under your control, you are responsible for the measures or changes to be implemented.
Here are some examples of internal indicators to consider:
- Technical/technological competencies
- Company reputation and image (online reputation)
- Quality and conveyed values
- Points of sale
- Location and catchment area
- Presence (local, national, international)
- Partnerships
- Brand and intellectual property
- Tools and equipment
- Features
- Etc.
Analysis of internal factors comprises the strengths and weaknesses stemming from the internal processes of the company. The associated issues are typically easier to resolve since you have more control over the outcome.
- Analysis of the external environment
The external environment encompasses various factors or parties that the company encounters, with varying degrees of power to take corrective actions.
In the context of a SWOT external analysis, we examine the macro-environment (economic, demographic, technological, cultural factors, etc.) and the micro-environment (competitors, customers, suppliers, etc.), while identifying opportunities and threats that can impact the company.
For example:
- Legislation regarding your industry
- New political measures
- Aggressive competition
- Economic or health crises
- Sectoral developments and trends
- Changes in consumer behavior or purchasing habits
- Climate conditions…
All of these elements must be identified to transform threats into opportunities and find the best strategic positioning to penetrate the market.
- Corrective Measures
Following these internal and external analyses, the SWOT matrix synthesizes the results of the strategic diagnosis: on one hand, the strengths and weaknesses of the company; on the other hand, the threats and opportunities in the market.
The gathered information allows you to define priority actions to plan the strategy to be adopted. You can identify these actions by combining the different axes of the SWOT:
- S-O (Strengths and Opportunities): Leverage your strengths to seize opportunities more effectively.
- S-T (Strengths and Threats): Utilize your strengths to counter or minimize threats.
- W-O (Weaknesses and Opportunities): Evaluate what you can improve (your weaknesses) to seize these opportunities.
- W-T (Weaknesses and Threats): Address your weaknesses, find solutions to anticipate risks, and implement preventive measures.
The SWOT Matrix
To conduct your SWOT analysis, use the suggested questions and fill in the matrix we provide.
Some tips before you begin:
- Rely on concrete facts.
- Be concise.
- Keep your objectives in mind.