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SWOT analysis of your company

SWOT ANALYSIS OF YOUR COMPANY

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SWOT analysis is a strategic planning tool used to assess the current situation of a company or project.

To perform a SWOT analysis of a startup, the following steps must be followed

  1. Define the objective of the analysis: Before starting to analyse the startup, the objective of the analysis should be established. This can be to identify the strengths and weaknesses of the company, to detect opportunities in the market or to assess the threats faced by the startup.
  2. Identify internal strengths and weaknesses: In this phase, the internal performance of the startup is assessed. It is important to identify areas where the company has competitive advantages (strengths) and areas where it has disadvantages (weaknesses). To do this, factors such as team quality, innovation, cost structure and efficiency in task execution can be analysed.
  3. Identify external opportunities and threats: In this phase, the environment in which the start-up operates is analysed. Market opportunities (such as unmet demand for a product or service) and threats (such as the entry of new competitors or changes in regulation) must be identified. Factors such as market trends, competition and changes in the political and economic environment can be analysed.
  4. Identify actions to be taken: Once the strengths, weaknesses, opportunities and threats have been identified, the actions that the startup needs to take to improve its position in the market should be identified. Specific objectives can be defined and an action plan developed to achieve them.

It is important to note that, SWOT analysis should be a continuous process, since, the business environment and the startup's situation may change over time. Therefore, It is advisable to carry out a SWOT analysis on a regular basis to keep the company's strategy up to date. In short, the SWOT analysis of a startup consists of identifying the company's strengths, weaknesses, opportunities and threats, in order to develop a strategy that allows it to improve its position in the market and achieve the established objectives.

How to use the SWOT analysis to discover competitive advantages (+) in a new company?

SWOT analysis is a useful tool for discovering a company's strengths and weaknesses, as well as the opportunities and threats it faces in its environment. Once these four areas have been identified, they can be used to determine the company's competitive advantage.

TO USE THE SWOT ANALYSIS TO DISCOVER A COMPANY'S COMPETITIVE ADVANTAGES, THE FOLLOWING STEPS CAN BE TAKEN:

  1. Identify the company's strengths: these are the areas in which the company excels and which give it an advantage over the competition. By identifying these areas, you can build on them to increase the company's competitive advantage.
  2. Identify the company's weaknesses: These are the areas in which the company falls short or is not on par with the competition. By identifying these areas, work can be done to improve them and reduce the company's competitive disadvantage.
  3. Identify opportunities in the environment: These are trends or situations in the environment that the company can take advantage of to increase its competitive advantage. For example, a new technology or market trend may present opportunities for the company.
  4. Identify threats in the environment: These are trends or situations in the environment that may be detrimental to the company. For example, a change in regulation or new competition may present threats to the company.

By analysing the four areas of SWOT, competitive advantages can be discovered that can be used to improve the company's market position.

How to apply the SWOT analysis in your company?

One of the advantages of the Dafo analysis is that it can be applied in any type of company (regardless of its size and activity) or business area. The first step is to describe the current situation of the company or department in question, identify strategies, changes in the market and our capabilities and limitations. This will serve as a basis for make a historical, casual and projective analysis.

Internal analysis

It consists of detecting the company's strengths and weaknesses that give rise to competitive advantages or disadvantages. The following factors are studied in order to carry this out:

  • Production. Production capacity, manufacturing costs, quality and technological innovation.
  • Marketing. Product line and range, image, positioning and market share, pricing, advertising, distribution, sales team, promotions and customer service.
  • Organisation. Company structure, management and control process and culture.
  • Staff. Recruitment, training, motivation, remuneration and rotation.
  • Finance. Available financial resources, level of indebtedness, profitability and liquidity. Research and Development . New products, patents and lack of innovation.

External analysis in the Dafo method

It is about identifying and analysing the threats and opportunities in our market. It covers several areas:

  • Market. Defining our target (+) and its characteristics. Also general aspects (market size and segment, evolution of demand, consumer desires), and behavioural aspects (types of purchase, purchasing behaviour).
  • Sector. Detect market trends to identify potential opportunities for success, studying companies, manufacturers, suppliers, distributors and customers.
  • Competence. Identify and assess the competence (+) and potential. Analyse your products, prices, distribution, advertising, etc. 
  • Environment. These are the factors that we cannot control, such as economic, political, legal, sociological, technological, etc.

Defining the strategy

SWOT helps us to consider the actions we should take to take advantage of the opportunities detected and to eliminate or prepare the company against threats, being aware of our weaknesses and strengths. Once the objectives have been set - which must be prioritised, quantified, real and consistent - we will choose the strategy to reach them through marketing actions. Let's review the possible strategies (+) with examples.

What factors should be considered in a SWOT analysis?

INTERNAL STRENGTHS

  • Fundamental capacities in key activities.
  • Superior technological skills and resources.
  • Ownership of the core technology.
  • Improved manufacturing capacity.
  • Cost advantages.
  • Access to economies of scale.
  • Product innovation skills.
  • Good image among consumers.
  • Products (brands) that are well differentiated and valued in the market.
  • Better advertising campaigns.
  • Specific or functional strategies that are well thought out and designed.
  • Managerial skills.
  • Organisational flexibility.
  • Others.

INTERNAL WEAKNESSESA

  • There is no clear strategic direction.
  • Inability to finance the necessary changes in strategy.
  • Lack of some key skills or capacities.
  • Research and Development backlog.
  • Higher unit costs compared to direct competitors.
  • Below-average profitability.
  • Excessive internal operational problems.
  • Obsolete facilities.
  • Lack of managerial experience and talent.
  • Others.

EXTERNAL OPPORTUNITIES

  • Enter new markets or segments.
  • Serving additional groups of customers.
  • Expansion of the product portfolio to meet new customer needs.
  • Rapid market growth.
  • Diversification of related products.
  • Vertical integration.
  • Elimination of trade barriers in attractive foreign markets.
  • Complacency between rival companies.
  • Others.

EXTERNAL THREATS

  • Entry of new competitors.
  • Increased sales of substitute products.
  • Slow market growth.
  • Changing consumer needs and tastes.
  • Increasing bargaining power of customers and/or suppliers.
  • Adverse changes in exchange rates and trade policies of other countries.
  • Adverse demographic changes.
  • Others.

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Picture of Jaime Cavero

Jaime Cavero

Presidente de la Aceleradora mentorDay. Inversor en startups e impulsor de nuevas empresas a través de Dyrecto, DreaperB1 y mentorDay.
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