SWOT analysis

The SWOT analysis is a procedure that is used to determine a company's position and develop its strategy. The analysis provides the actual status of a company and its environment and analyzes the current strengths, weaknesses, future opportunities and risks.

Definition / explanation

The term "SWOT" is made up of the following English terms:

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

The analysis serves the systematic clarification of the status quo and the environment of companies with regard to strengths, weaknesses, opportunities and risks. In terms of content and technology, it can also be used for projects. Overarching goals: recognize current problems, avoid future mistakes, seize opportunities.

Carrying out a SWOT analysis

1st step: research
The SWOT analysis is divided into a past-related (strengths-weaknesses, SW) and a future-oriented view (opportunity-risks, OT).

Strengths and weaknesses - The basis is intensive research: What are the company's strengths (including products, processes), where was it better than the competition? In return: Why were orders not acquired? Where are improvements needed?

chances and risks - With regard to the analysis of the market environment (OT): What changes are emerging in technology and the market? Are there any legal innovations or changes in customer requirements? What are the competitors doing?

2nd step: Creation of the SWOT matrix
In the Four-field matrix the strengths / weaknesses are compared with the opportunities / risks in order to make connections visible. Further analysis orders result from the four combinations:

  • Strengths / opportunities: expand (check whether investments need to be made)
  • Weaknesses / opportunities: catching up (analysis of whether resources should be built up)
  • Weaknesses / Risks: Avoid (check whether a withdrawal is necessary)
  • Strengths / Risks: Safeguarding (Analysis of Risk Effects)

3rd step: Analysis and implementation of the measures

Common mistakes and weaknesses

The research effort can overwhelm the team carrying out the SWOT analysis (e.g. industries in transition, small-scale company structure).

Problematisch kann auch eine fehlerhafte Bereitstellung der Informationen werden. Zudem sind die Kriterien der Analyse nicht klar voneinander abzugrenzen, consequences können Fehlsignale und fehlende Entscheidungsklarheit sein.

Summary

  • SWOT analysis is used to determine the position and develop strategies of companies
  • provides an actual state of the company and the environment
  • examines current strengths, weaknesses, future opportunities and risks
  • is a preliminary stage for strategic planning and strategy implementation
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