What is a SWOT analysis and how to do it correctly
As part of analytical operations, several different tools and techniques are employed. A marketing strategy and overall business strategy sometimes include a SWOT analysis as a business tool or approach. The SWOT analysis was developed in the middle of the 20th century by business consultant Albert Humphrey. It is currently one of the self-improvement techniques that is most frequently employed in the corporate sector. It is utilized to give a detailed evaluation of how well the business manages its internal and external aspects, eventually assisting in the improvement or degeneration of the organization.According to BABOK, “SWOT analysis is a simple yet effective tool used to evaluate an organization's strengths, weaknesses, opportunities, and threats to both internal and external conditions”.
The Four Components of a SWOT Analysis
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. Analysis may be done with a straightforward list, but a SWOT diagram is the most popular approach.
Figure 1 - SWOT diagram
Strengths (S): Strengths are internal qualities that a company possesses that set it apart from its rivals. They might be things like a solid brand reputation, a talented staff, cutting-edge products or services, effective procedures, or a devoted clientele.
Weaknesses (W): The internal elements that disfavor an organization are the main topic of this section. They can include a dearth of tools, a lack of knowledge or abilities, or ineffective procedures. By identifying its deficiencies, the company may better its performance as a whole.
Opportunities (O): These are external elements that can be used to gain a competitive edge. The advent of new technology, shifting market patterns, or the creation of brand-new prospective markets for the good or service are all examples of opportunities.
Threats (T): External elements that undermine an organization's success are known as threats. Competition from existing or new competitors, rule changes, economic downturns, or changes in customer behavior or tastes are a few examples.
Opportunities and threats create the conditions for strengths and weaknesses to be identified in a SWOT analysis.
How to Do a SWOT Analysis
The steps to perform a SWOT analysis are as follows:
1. Define the scope: It is crucial to establish the goal prior to performing a SWOT analysis. It might be a particular product, a company department, or the entire company.
2. Gather Information: Get data about the internal and external environments that the organization is exposed to. Examine the marketplace, consumers, rivals, suppliers, and distributors.
3. Identify Strengths: The organization's key skills, unique selling points, and resources that can provide it an edge over rivals should be identified. They may include characteristics like a reputable brand, solid financial results, distinctive product offers, or a highly qualified workforce.
4. Identify Weaknesses: Determine the areas where the organization lacks a competitive edge, such as a shortage of funds, stale technology, poor management, or low staff morale.
5. Identify Opportunities: Determine the external variables, such as an expanding market, a change in customer preferences, or technology breakthroughs, that may present growth prospects.
6. Identify Threats: Determine the external variables, such as greater competition, economic downturns, changes in legislation, or developing technology, that may impede the organization's growth.
7. Analyze the Results: Examine the lists of advantages, disadvantages, opportunities, and dangers and look for parallels and linkages.
8. Develop Strategies: Use the findings of the SWOT analysis to create plans that will maximize the company's strengths and opportunities while reducing the effect of its weaknesses and threats.
9. Review and Revise: A SWOT analysis is a continuous process. In order to stay up with the evolving internal and external environment, it should be continually examined and updated.
There are two possibilities once the concepts are grouped into a SWOT diagram:
● Match opportunities and strengths.
● Transform weaknesses and threats into strengths or opportunities. A SWOT analysis may assist companies in identifying areas for growth and developing plans to maximize their strengths and opportunities while limiting their weaknesses and threats by using the processes outlined above.
Guideline questions for a SWOT analysis
While performing a SWOT analysis, keep the following questions in mind:
Strengths:
● What special skills and resources does the company have at its disposal?
● What benefits do the company's goods or services offer?
● What are the organization's main competitive advantages?
● What are the advantages of the company's culture, brand, and standing?
Weaknesses:
● What has to be improved inside the company?
● What constraints or challenges does the company face?
● What are the areas where the company is falling short of its rivals?
● What drawbacks do the company's culture, brand, and standing have?
Opportunities:
Figure 2 - Steps of SWOT analysis● What are the new industry trends and possibilities that the company may take advantage of?
● What prospective areas exist for development and growth?
● What new ideas or technology can the company use to boost its performance?
● What developments in the regulatory landscape can the company take advantage of?
Threats:
● What are the new industry trends and possibilities that the company may take advantage of?
● What prospective areas exist for development and growth?
● What new ideas or technology can the company use to boost its performance?
● What developments in the regulatory landscape can the company take advantage of?
By responding to these concerns, the company may gain a thorough knowledge of its internal and external aspects and develop a plan to capitalize on its advantages, lessen its disadvantages, seize opportunities, and neutralize threats.
Case: Electronic health record system
Background: An electronic health record (EHR) system is a digital tool that enables healthcare providers to document and manage patient health information, such as medical histories, test results, medication lists, and other important data. The EHR system is designed to replace paper-based records and improve the quality and efficiency of healthcare delivery.
Context: The healthcare organization in this example is a healthcare system that currently uses paperbased medical records. The organization has recognized the need to upgrade to the EHR system to improve patient safety and care quality, streamline documentation and record keeping, and better coordinate care among healthcare providers.
Strengths:
● increased treatment quality and patient safety;
● simplified record-keeping and documentation procedures;
● improved interprofessional care coordination
Opportunities:
● enhanced data analytics for clinical and organizational decision-making;
● improved communication and patient involvement;
● a rise in production and efficiency
Weaknesses:
● high installation and maintenance costs;
● workflow interruption during changeover possible;
● some healthcare practitioners show resistance to change
Threats:
● cyber security dangers;
● possible data breaches or loss of private patient data;
● possibilities for legal and regulatory compliance problems
Ultimately, this SWOT analysis aids healthcare companies in better understanding the advantages, dangers, and difficulties of putting an EHR system into place.