What is SWOT analysis? Model, uses, competitive advantages ✔️

What is SWOT analysis? Model, uses, competitive advantages ✔️

Surely you have heard the term "SWOT analysis" many times and, most likely, even learned about it in high school or college. However, if the concept is not very clear to you, don't worry! Brightway® experts will help you remember the definition, give you an example, and help you understand when and, more importantly, why such research is particularly useful.

SWOT analysis - definition. The name is an acronym, coming from the English words Strenghts, Weaknesses, Opportunities and Threats. SWOT analysis is therefore an overview of an entity (company or individual), in the context of entering the market, launching a new product/service, taking up a management position, etc.

Thus, a model SWOT analysis should correctly and as objectively as possible identify both the advantages and opportunities that the individual/legal entity enjoys and the disadvantages and dangers that it might face in the short, medium and long term. Barring the occurrence of totally unforeseen situations, such as crisis situations, such research should provide a realistic and reliable picture for assessing the success rate before taking action such as those listed above.

SWOT analysis - model. As an example, we have chosen the situation of a sushi restaurant with some age on the market, which is looking to expand:

Strengths - low prices, location in a commercially visible area, friendly employees, only sushi restaurant in the area;

Weaknesses - decor is not necessarily Japanese, doesn't stand out from other sushi restaurants in town, cheap plastic menus, fish is not always fresh or high quality;

Opportunities - opening new restaurants in town, changing supplier for fresh fish, improving decor and menus, improving employee retention rate, monitoring product/service quality to prevent negative reviews;

Threats - low employee retention rate, difficulty in finding new employees, negative reviews, competition could open restaurants in the area, possibility of food poisoning due to poor fish quality.

As you can see, SWOT analysis reveals both aspects related to the internal environment (strengths and weaknesses of companies/employees) and aspects related to the external environment (opportunities and threats related to the business environment, competition, economic situation, geographical position, etc.).

Following the SWOT matrix, answering questions such as "What are we best at?", "What are we not doing well?", "How can we create a competitive advantage?" or "What could the competition do to our detriment?", the strategy for the future will be set, building on the advantages and trying to correct mistakes or minimise risks.

At Brightway®, we use SWOT analysis models in several trainings, among the most representative are the Negotiation and Persuasion courses. Such an exercise is indispensable for setting objectives and analysing potential dangers.

At the end, we ask you two more questions: what would your SWOT analysis look like as an employee or partner? And how can you help your organisation to evolve with the help of this useful tool? Come and find out the answer at our expert-led trainings!

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