What is the SWOT matrix and its impact on business

What is the SWOT matrix, and how can it transform your business?

To work according to a detailed plan and achieve results, you should familiarize yourself with the SWOT matrix and its impact on business.

A proper understanding of the SWOT table can open your view to aspects of your business that you may not even be aware of!

The SWOT matrix is ​​a table for assessing the company's position and developing strategic planning.

SWOT evaluates internal and external factors, as well as the current and future potential of companies. This matrix helps companies to have a realistic view based on strengths and weaknesses.

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What does the word SWOT mean?

Before we know what swot is, we first want to talk a little about the word “SWOT” and see what this word means.

The word SWOT is made by putting together the first letters of the four words Strengths, Weaknesses, Opportunities, and Threats. As the name suggests, this technique helps us to understand our strengths and weaknesses, recognize the opportunities before us, and effectively manage possible threats.

History of the creation of SWOT analysis

It was in the 60s or 70s that a university professor named Albert Humphrey was in charge of a research project at Stanford University in the United States. This professor came up with a technique called the SOFT technique to evaluate their strategic plans and understand the reason for their failure. Just like the SWOT method, the SOFT method also uses the first letters of four words:

The letter S for the word Satisfactory (meaning satisfactory) for parts of the work that are currently satisfactory.

The letter O for the word Opportunities (meaning opportunities) is for opportunities that can be used for progress in the future.

The letter F for the word faults (meaning faults) to identify the faults in the work.

The letter T for the word Threats (meaning threats) indicates the threats that hold back the progress and success of the work.

Now, you may ask how the SOFT method became SWOT?

In 1964, a seminar called “Long-Term Planning” was held in Zurich (Switzerland). At this seminar, one of the speakers introduced the SWOT model and told the audience that this model was an adaptation of Mr. Humphrey's SOFT model.

What is SWOT Analysis?

SWOT analysis is one of the effective techniques that helps us to evaluate the internal and external factors involved in an issue and use the relationship between them to our advantage.

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SWOT table: a strategy

We all know that we need a strategy to do anything. Whether in the field of personal issues or the field of business. But what many people don't know is what parts a strategy has and how we can use SWOT analysis as a strategy.

Each strategy includes two major categories of factors: internal factors and external factors.

Now, if you pay a little attention, you will realize that the strengths and weaknesses that the SWOT matrix shows you are usually internal factors, while opportunities and threats are generally known as external factors.

One of the biggest benefits of the SWOT matrix is ​​that it can be a great help not only in business but also in personal decision-making. Now let's take a closer look at it.

S: What are your strengths?

To find the answer to this question, ask yourself a few key questions.

• What benefits does our business offer to customers?
• What do we do better than others?
• What do people think about our positive qualities?
• What factors have increased our sales?
• What is our advantage over other competitors?

Be careful that when you are evaluating your strengths, you should consider them in comparison to your competitors. For example, if all your competitors offer high-quality products, producing high-quality products is no longer your strength, but a necessity. It is better to find your strengths by looking at what factor or factors separate you from the rest and give you an advantage in the competition.

W: What are your weaknesses?

After identifying your strengths, it is time to look at your weaknesses. Ask yourself:

• What areas of our work do we need to improve?
• What is causing our sales to drop?
• What should we ignore?
• What does our business look like from the outside?
• What do our customers see as our weaknesses?

O: Assess the opportunities ahead.

In my opinion, the most useful and enjoyable part of the SWOT analysis is finding opportunities and using them. You may ask what do you need to discover opportunities? To find opportunities, you need the previous two steps, and in addition, you need to open your eyes and ears to the events around you and be aware. Opportunities that may arise for you and taking advantage of them will lead you several steps forward. Such opportunities can even be a regular event.

Suppose you have an online bookstore and do you plan a special program for “Book and Reading Day” or do you simply skip it?! You can use this common event to increase your sales and build your brand. How, you ask? Simply! Free book delivery, book signings, reasonable discounts (not too much!), book reading competitions, the news of a new book being published, and many other things mean taking advantage of the opportunity!

Opportunity rarely knocks twice! Even in the business world!

Of course, the issue I mentioned was just a simple example to clarify the point, otherwise, many opportunities are waiting for you to identify and use them. For example, new changes in people's lifestyles (that people have increasingly turned to the virtual world), or changing social norms and patterns (such as creating web pages to congratulate occasions or using applications to order food) are all examples of opportunities that you can take advantage of in the best way.

T: We turn threats into opportunities!

Do you want to know what threats are coming your way? Ask yourself these questions:

• What are our competitors doing?
• Do we have unpaid debt?
• What obstacles might stand in our way?
• Are technological changes, lifestyle changes, or even government changes threatening our market?
• Are standards changing? Do we have a weakness that could hurt us?

Create a SWOT questionnaire for business analysis

Now that you are fully familiar with SWOT, it is time to create a SWOT questionnaire to not only gain a better understanding of your business situation, but also to develop strategies that will help your business grow and compete better in the market.

The purpose of creating this questionnaire is to help you gain a better understanding of how to carry out this analysis in practice.

So if you have a business (or even if you are interested in marketing topics) we suggest you don’t miss this opportunity and start creating a SWOT table to analyze your business right now.

For those who are interested in digital marketing topics or have an online business, I suggest you also read the article Niche Marketing Strategy and its Effects.