SWOT analysis: what it is, how it is done and examples of leading companies

In times of Big Data, Artificial Intelligence and increasingly sophisticated technological resources, sitting down with a paper and a pen to write down positive and negative variables of a company seems to be an outdated analysis method.

However, the SWOT analysis, a mandatory exercise in any digital marketing course, continues to be, according to the experts, an essential starting point both to face an entrepreneurial project and to organize the action plans of companies by smaller, medium or large that be.

But what is SWOT analysis, how is it done and examples of its application in leading companies.

What is SWOT

SWOT, a classic resource used in the business world to “find solutions”, was born out of a problem. Its creator was Albert S. Humphrey, a researcher at Stanford University, California, and a consultant specializing in organizational management who, in the late 1960s, wondered why the strategic planning of companies failed.

Humphrey was looking for a culture change in companies, and in this way he developed the SOFT (Satisfactory, Opportunity, Failures and Threats), a formula designed to detect in which sector the companies were strong or weak and to be able to correct the course to achieve an advantage about the competition.

This technique is known in Latin America as SWOT analysis, (an acronym that stands for Strengths, Weaknesses, Opportunities and Threats), and today it is not only used to measure performance with respect to competitors, but it is an important instrument in project management as it helps to detect and systematically analyze all the variables involved in a business. SWOT is a simple, clear and practical tool that facilitates decision-making: it helps to identify obstacles to meeting objectives and thus improve and modify the action plan.

Strengths and Weaknesses refer to assessments of internal aspects on which it is possible to act. While Opportunities and Threats constitute the environment, they are external realities that can only be inferred and, although it is very difficult to modify them, there are resources to take advantage of them (in the case of Opportunities) or face them in a better way (in the case of Threats).

“The interesting thing about this self-assessment tool is that it allows us to play with the four categories, relate them and intertwine them. We can, for example, identify with which Strengths to leverage certain Opportunities or avoid certain Threats and in this way propose specific objectives, strategies and actions that help us to enhance Strengths, draw on Opportunities, neutralize Weaknesses and mitigate Threats ”, explains the professional development specialist Mercedes Korin.
SWOT Features

The SWOT analysis is assembled in a spreadsheet – there are hundreds of models available on the Internet to print – and each segment is represented in a different quadrant (Strengths, Weaknesses, Opportunities and Threats) where all the information considered useful is dumped. But it is not just a matter of filling four sectors with the first thing that comes to mind: for the SWOT to be effective it is necessary to carry out a deep, thorough and objective analysis of the real situation.

What does each item to analyze consist of? The Strengths are made up of all the elements that advantage our project or business over other similar ones. It is the positive characteristics, what is “under control.”

Weaknesses, on the other hand, are the negative aspects of the internal situation, which “plays against us”, puts us in inferior conditions compared to the competition and makes it difficult for us to reach the proposed objectives.

As for Threats, they are negative factors outside the company, which can threaten in the present or hinder future projections. Difficult to control, if necessary it will be necessary to develop a contingency plan to deal with them.

And then there are Opportunities, which, as with Threats, are external and it is not feasible to exercise direct control over them. You can, however, try to anticipate changes that could benefit you and have a brief explanation ready on how to take advantage of these variations.
Guide to assembling the SWOT

Eduardo Rodríguez, business consultant and Academic Director of the Digital Marketing postgraduate course at CAECE University, suggests some key topics and questions to put together the analysis.

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