SWOT Analysis Process
The SWOT analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations. SWOT is a framework for identifying and analyzing the internal and external factors that can have an impact on the viability of a project, product, place, or person. It is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the Opportunities open to you and the Threats you face.
SWOT analysis has several steps.
These steps include Broad external environment analysis, Competitive analysis, internal environment analysis, and SWOT analysis. All of these four steps are discussed below:
Step – 1: External environment analysis: In this step, (1) political, (2) economical, (3) social and (4) technological areas are analyzed. It includes the following procedures:
- Identify the key forces that are most likely to affect the organization;
- Monitor information on the key environmental forces;
- Select the method to be used in forecasting these forces;
- Forecast the trends in these forces;
- Identify the threats to and opportunities for the organization on the basis of the forecast of these forces.
Step – 2: Competitive analysis: Competitive analysis generally includes two areas for analysis: 1) industry structure and 2) Individual competitor. It includes the following procedures:
- Analyze the competitive nature of the industry;
- Identify and analyze competitors;
- Identify key strengths and weakness of the organization as compared to those of its competitors;
- Identify the threats & opportunities of the organization on the basis of its Industry competitiveness.
Step – 3: Internal environment analysis: In this step; 1) financial position, 2) Product or service position, 3) Product or service quality; 4) Marketing capability; 5). Research and development capability; 6) organizational structure; 7) Human resource; 8) Conditions of facilities and equipment; 9) Past objectives and strategies are analyzed.
It includes the following procedures:
- Analyze each of the above areas;
- Identify the internal strengths and weakness that has been obtained from the result of the analysis.
Step – 7: SWOT analysis: It includes strengths, weaknesses, opportunities, and threats analysis. It includes the following procedures:
- Assess the attractiveness of the organization’s situation;
- Draw conclusions regarding the need for strategic action.
So, these are the step-by-step summary of a SWOT analysis process.