SWOT Analysis is one of the effective tools for strategic planning and strategic management, it is a framework used to evaluate a company’s competitive position. Therefore, it represents the starting point from which organizations begin to define goals, develop plans and formulate work policies, in addition to identifying material, financial and human requirements.

Who developed SWOT analysis?

Albert Humphrey an American business and management consultant has developed this approach back in 1969 and early 1970 during his work at the Stanford Research Institute (SRI).

What SWOT refers to?

SWOT is an acronym that stands for (Strengths, Weaknesses, Opportunities, and Threats). Each point in this model represents a vital aspect that affects the survival and continuity of the organization in a cutting-throat work environment, including internal and external factors.

This analysis can be applied in all administrative, economic, productive, or service fields, whether governmental or non-governmental, and its application extends to law enforcement agencies and crisis management.

How to implement SWOT analysis?

To implement SWOT analysis effectively, it is important to assemble a team that should contain experts from various fields which are related to the organization’s activity such as (production, marketing, human resources, finance… etc.) in order to be able to formulate a comprehensive vision on how the future of the organization will be in the light of the provided data along with the vision, mission, goals, and plans of the organization.

1. Strengths and weaknesses:

This is the first aspect of SWOT analysis to be addressed and determent through collecting data from multiple sources:

• Monitoring customers’ reviews:

Modern organizations give attention to customers’ reviews and follow up with them to measure their satisfaction with the product or service, however, there are many methods to monitor customers’ reviews such as:

– Questionnaires.

– Follow-up phone calls.

– In-person interviews.

– Monitoring complaints

• Organizational image:

Alike persons, organizations have their own personality which reflects a mental image among the community it serves. However, such image is determined through different external factors such as political, social, legal, economic, and environmental, along with internal factors such as the organization’s identity, strategy, shared values, and leadership. Therefore, the organizational image is a reliable indicator for determining what the strengths of the organization are.

• Comparing the organization with its competitors:

Comparing the organization’s performance with its competitors in the market is one of the important factors to determine the points of excellence and superiority in the organization, which makes it have a competitive advantage that drives customers to deal with it or buy its products thus maintaining loyal to it regardless the competitors’ tries to lure them away.

• Evaluate the products and services offered by the organization:

The organization’s strategic planning team evaluates the products and services offered by the organization from the market point of view in terms of monitoring and evaluating sales during a certain period of time and identifying the most popular and selling products during that period, which is one of the organization’s strengths. A range of tools can be used to measure the strength of a product in the market such as the product life cycle as well as the Boston consulting group Matrix.

• Hiring consultants from outside the organization:

It may require the use of experts and consulting offices from outside the organization in order to research and analyze the operations carried out by the organization as well as its products, in addition to measuring the quality of products and their popularity in the market. In fact, outsourcing the evaluation is useful, as the external source usually sees some of the things that organizations take for granted, which may be the main reason for their superiority and leadership in one of the business areas.

In addition to the mentioned tools for identifying areas of strength and weakness, weaknesses in organizations can be addressed through the following variables:

2- Opportunities and threats:

The efficient determination of opportunities and threats depends on the extent of the organization’s effectiveness of scanning the environment where it operates in either the business environment or the external environment.

Therefore, the efficiency of the environment scanning can depend on the following factors:

• The emergence of new competitors:

The entry of new competitors in the market is one of the threats that organizations must monitor and study closely to know the extent of the impact of this threat on their continuation and survival in an era characterized by cutthroat competition.

• Introduction of new technologies:

Continuous development and improvement are some of the characteristics of organizations that seek superiority and excellence, therefore many organizations invest in research and development to ensure their superiority and thus provide modern technologies in the market.

Therefore, organizations must absorb this technological development and apply it in their operations and develop their products to ensure remaining in the competition. Kodak is one of the examples that did not realize the technological development and became at the bottom of the market after it was a pioneer.

• Changes that occur in similar markets in other countries:

Organizations should follow the changes that occur in similar markets in other countries in terms of offer and demand, customers’ behavior, and trends, which the winds of change may bring to the country in which the organization operates in a world living in the era of globalization and the exchange of ideas and cultures.

In addition to the above, organizations should learn and analyze the environmental variables that occur around the organization and the business environment in general, such as economic, social, political, demographic, and cultural variables that may affect the behavior of customers, their orientations, their priorities, and thus their decisions. Studying those variables makes organizations able to hunt opportunities or reduce risks.

What happens after SWOT analysis?

After collecting data related to strengths, weak points along with scanning the environment to detect opportunities and threats it is time to put them in use through the following table:

Conclusion:

SWOT analysis is an effective tool for strategic planning and strategic management, however, it requires a competent team to work on it which contains experts from all fields of operations in the organization to be able to collect and provide reliable data about strengths and weak points which are inside the organization and under its control along with scanning the environment for opportunities and threats which are outside the organization and has no control on, in order to take advantage of the strengths to seize opportunities and reduce the severity of risks, as well as to take advantage of any opportunity to strengthen the weaknesses in the organization to face potential risks.