How to effectively use SWOT analysis to achieve your business goals

What is a SWOT analysis? 

The acronym SWOT is based on the English terms Strengths, Weaknesses, Opportunities and Threats. This tool is one of the most versatile analytical techniques used to identify and evaluate various aspects that affect your company or project. The concept of SWOT analysis was first introduced in 1960 by Albert Humphrey and has been widely used ever since. 

How to make a SWOT analysis? 

As mentioned here, SWOT analysis is a versatile method that is commonly used to map and evaluate the external and internal factors affecting the operation of a company. Although it may seem simple, its proper implementation requires thorough preparation and analysis.  

However, the preparation of a SWOT analysis involves much more than simply making lists. When you set out to develop the first inventory (of strengths, for example), the very process of thinking about and conducting the research will often trigger other associations that may involve lists of weaknesses, opportunities, or threats. To conduct a comprehensive and accurate SWOT analysis of a company, you need to gather and analyze data from a variety of sources - from customers and employees to competitors and industry experts. But how to do it effectively?  

In this section, we'll look at the specific steps you should take when compiling a SWOT analysis. You should start with the first and most basic step: identifying your business's strengths. 

1) Strengths of the company 

The first important element of a SWOT analysis is your strengths. These define the assets of your business that can play a key role in creating an effective strategy. Recognizing these strengths allows you to identify areas where you have a competitive advantage. For example, what do we include here? 

• Areas in which your business excels.  
• Characteristics that differentiate you significantly from your competitors.  
• Internal resources, such as competent and experienced staff.  
• Tangible assets, such as intellectual property, financial base, proprietary technology, etc. 

This area can include both abstract elements, such as attributes associated with your organisation's brand, as well as more tangible things, such as the unique selling proposition of a particular product line, etc.  

2) Business weaknesses 

Once you're clear on your strengths, it's a good time to address weaknesses. By taking an open look at the areas in which your business may be underperforming, you'll gain valuable insight into opportunities for improvement. Identifying and understanding these weaknesses provides an opportunity not only for growth, but also for strategic planning to address challenges and strengthen your overall competitiveness. What exactly is involved? 

• Things your business is missing. 
• Things your competitors do better than you. 
• Limited resources (in terms of funding, materials, human resources or information that the company uses). 
• Unclear USP (Unique Selling Point). 

What is standing in the way of your business or project? Organizational issues such as lack of skilled people, budget constraints, etc. may be to blame. This section may also include your weaknesses in relation to other companies or the aforementioned lack of a clearly defined USP in a competitively saturated market. 

Tip: Read our article The 4P and 7P Marketing Mix and its importance to business success. 

3) Opportunities 

This brings us to another important aspect, which is opportunities. Under this point are situations that can be beneficial for your business. 

• Few competitors in your area. 
• Emerging needs for your products or services. 
• Press or media coverage of your company, etc. 

These factors offer a chance to grow and develop in line with current market needs. By analyzing the opportunities, you can identify areas where your expertise can be leveraged. In short, this element of the SWOT analysis covers everything you can do to improve sales, grow your company, or further your organization's mission. 

4) Threats 

The final element of the SWOT analysis is threats - this includes any factors that pose a potential risk to your company itself or threaten its ability to achieve success and growth. It is important to carefully assess which factors these might be so that you can respond appropriately and plan strategies to manage them. Some of these threats may include: 

• Emerging competition that may threaten your market position. 
• Changes in the regulatory environment that could affect your business. 
• Negative publicity. 
• Changes in customer attitudes towards your products or services, which could affect demand. 

Define your goals first 

Before you start collecting data from different stakeholder sources (employees, customers, partners, etc.), it is crucial to clearly define the objectives and scope of your SWOT analysis. Think about what key questions you want to answer with this analysis and identify the main areas you want to focus on. Next, think about how you plan to use the results of this analysis to shape your strategies and decision-making. Having clear and specific objectives will help you to better focus your research, methods and criteria. 

Select data sources 

Depending on your objectives and scope, you may need to obtain data from different sources involving different stakeholders. You can use the following methods for this purpose: 

• Customer feedback: customers can provide valuable feedback through surveys, interviews, reviews or social media. This information can help you better understand their needs and preferences. 
• Employee feedback: Internal employees can provide important insights into your organisation's processes, culture, resources, capabilities and challenges. You can get feedback through surveys, interviews, etc. 
• Collaboration with partners: Partners can share information about collaborations and agreements through meetings and reports. This collaboration can provide new relevant insights for your business. 
• Competitive analysis: Gaining information on market position and competitive differentiation is possible through secondary research, benchmarking or competitive analysis. This will help you better understand the competitive landscape. 
• Expert opinions: industry experts can mention important trends and forecasts for your industry. This information can be obtained from reports, publications, blogs, podcasts, or webinars, etc. 

Thoroughly gathering information from these various sources will allow you to make better informed decisions and plans based on a comprehensive view of your business and market. 

Tip: Read our article How to do benchmarking in practice. 

Use appropriate data collection methods 

For effective data collection and analysis, it is important to choose methods that are appropriate to the data sources. Here are some options: 

• Questionnaires: a quantitative method using structured questions to measure customer satisfaction, employee engagement or market share based on a large sample of respondents. 
• Interviews: A qualitative method working with open-ended questions that are asked to a small sample of respondents. Interviews allow to explore customer needs, employee motivations or partner expectations. 
• Group meetings: another qualitative method where ideas, opinions and feedback on a particular topic or issue are generated in group discussions. 
• Secondary research: A method that uses existing data from external sources such as reports, publications, websites or databases. This type of research provides information on industry trends, competitor profiles or market opportunities. 
• Benchmarking: A method of comparison and evaluation that identifies differences, strengths, weaknesses or best practices between similar organisations or projects. 

Selecting the right methods for data collection is key to obtaining relevant and quality information for your SWOT analysis. 

Analysis and synthesis of your data 

Having gathered information from the various stakeholders, it is now time to move on to the practical step: creating a SWOT matrix. The following steps should be followed: 

• Visualize your data: use graphs and tables to display your data. This will help you identify key patterns and trends that could affect your organization. 
• Data interpretation: Draw conclusions based on the data you have visualized. For example, if you see an upward trend in sales, this could be an indicator of strength. 
• Data Synthesis: Based on your interpretation of the data, propose specific action plans. These plans should address your strengths, weaknesses, opportunities and threats. 
• Create a SWOT matrix: Finally, use all the information you have gathered to create a SWOT matrix. This matrix should graphically display all four aspects (strengths, weaknesses, opportunities, threats) and link them to your action plans. Each aspect of the SWOT matrix should be linked to one or more action plans. For example, if one of your strengths is the high quality of your product, an action plan could include a marketing campaign to highlight this strength. If one of the threats is a new competitor in the market, the action plan could include researching the competition and developing new product features. )

In this way, you not only analyze and synthesize the data, but you also get a concrete plan to use the results of the SWOT analysis to achieve your organization's goals. 

Verify and confirm the reliability of your information 

To achieve a high-quality SWOT analysis, it is essential to pay attention to verifying and confirming the reliability of your data. This stage is a key step to ensure that your analysis is based on relevant and truthful data.  

1. There are several criteria and methods you can use. One is data quality control, which involves a careful examination of the accuracy, completeness, consistency, reliability and validity of your information. This process allows you to identify and then improve any deficiencies in data quality, which is key to obtaining reliable outputs. 
2. Another technique you can use is data triangulation. This method involves validating your data from multiple perspectives, relying on multiple sources and methods. In this way, you will have a comprehensive and reliable data set, which will support the objectivity and credibility of your analysis. 
3. Finally - to make your analysis as comprehensive and accurate as possible - you can take advantage of additional feedback on the final collected information from other stakeholders. This will allow you to reflect on the data, test it in practice and fine-tune it further if necessary. This will ensure that the results of your SWOT analysis are credible and able to realistically reflect the status and prospects of your business or project. 

SWOT analysis in IT: A guide to effective assessment and planning 

In the context of IT, this method is often used to analyze software projects, infrastructure or overall IT strategy. Strengths might include technological advancements, an experienced team, or a robust architecture, while weaknesses might include inadequate resources, outdated technology, or security gaps. 

Opportunities and threats are external factors that can affect the success of an IT project. Opportunities may include new markets, technological innovations or legislative changes that promote growth. Threats could be competition, cyber-attacks or negative changes in the regulatory environment.  

In practice, a SWOT analysis in IT is often conducted in planning meetings, brainstorming sessions, or as part of a broader project evaluation. The results of the analysis are usually documented and used to guide strategic decision-making, task prioritization, and risk minimization. 

What might a SWOT analysis look like for a specific company?  

For a practical example, let's take a mini analysis of our company Algotech. We will try to identify its strengths, weaknesses, opportunities and threats. Since we specialize in providing complex IT services, such an analysis (if extensive) could provide valuable information for strategic planning and decision making.  

Strengths  

• More than 25 years of experience: a long presence in the market means a lot of experience and credibility. 
• A wide range of services: offering comprehensive IT services from cloud solutions to cyber security. 
• Adaptability:  Services and products tailored to customer needs.
• Satisfied customers: We have more than 500 satisfied customers. 
• In-house data center: the ability to securely store data in 3 independent physical locations. 

Weaknesses  

• Specialization: we are involved in many areas, which in pure theory could lead to less focus on specific specializations. 
• Complexity of services: the wide range of services may be confusing to some potential customers. 

Opportunities  

• Growth in cyber security: with the increasing number of cyber attacks, the demand for security solutions is growing. 
• Cloud services: the gradual move of companies to the cloud may bring us new customers. 
• NIS2 and regulation: firms will need help to comply with new and existing regulations. 

Threats  

• Competition: the rapid development of the IT sector means increasing competition. 
• Technological change: Constant changes in technology require frequent updates and investment. 
• Economic instability: The impact of economic factors on the IT sector. 
• Legislative risk: Changes in legislation, particularly in the areas of data protection and cyber security, can pose a risk to the operation of data centres and other IT infrastructures. 

SWOT analysis can really help your business 

A SWOT analysis is a key tool for any business that wants to understand its market position and identify areas for growth and improvement. As we have shown you, the process is not just putting together a SWOT matrix, but also a thorough collection and analysis of data. In today's turbulent times, it's important to stay one step ahead of the competition, and SWOT analysis is one tool that can help you do just that. 

Have you identified through SWOT analysis that your weaknesses include an IT problem? Do not hesitate to contact us via our contact form. We are here to help you achieve your business goals.