Business is a world where there is a lot of knowledge. In business, of course, this knowledge is very useful. By applying existing knowledge, companies can work more smoothly and know how to set clear goals. There is a science in business that is very useful and remains relevant today, namely SWOT.
You can be sure that knowledge of the method is widely known among people who work in the business world. But if you don’t know anything about SWOT, it doesn’t matter. It is never too late to learn about the SWOT analysis system, which is an acronym. For more details, let’s take a look at the explanation below.
What is SWOT?
SWOT analysis is an acronym for strengths, weaknesses, opportunities, and threats. SWOT analysis was first introduced by Albert Humphrey, who was a project manager at Stanford University.
This method was developed by Albert based on the assumption that an effective strategy emerges from internal and external factors of a company or organization. Therefore, Albert developed a SWOT system that combines four internal and external factors.
In addition, the SWOT analysis system developed by Albert is also used to find out what weaknesses exist in the company and, of course, must be avoided and corrected. Especially in business, there must be threats from the outside.
This is also the function of having a SWOT analysis system. In this way, from a business point of view, it will be much better in the future. The strategy that was developed was much more mature and able to identify the state of the industry at that time.
What is the Function of a SWOT Analysis System?
The function of this method is to analyze data from the company to find important aspects related to strengths and weaknesses, opportunities, and threats.
By knowing these four aspects, it is expected that the company can maximize strengths, reduce threats, develop opportunities, and minimize weaknesses.
This simply includes personnel, financial reports, and parties outside the company to see internal vulnerabilities that should be minimized as best as possible. Business owners need to know how to conduct a SWOT analysis to determine the future direction of the business.
SWOT Analysis Method
To conduct a SWOT analysis for a business, you need to form a team that includes representatives from all departments of the business. By forming a team of representatives from all departments, you can find out the strengths, weaknesses, opportunities, and threats that exist in each department.
Conducting a SWOT analysis is very similar to a meeting to hear the opinions of each department. The purpose of a SWOT analysis is to find out the right and wrong ways of doing things.
Example of a SWOT Analysis
To find examples of SWOT analysis used to create new strategies, you should know what each section contains. Let’s sort it by strengths, weaknesses, opportunities, and threats to find an example of a SWOT analysis.
1. Strength (Strength)
As the name suggests, strength (power) means the power that is in your business. Strength is one of the internal factors that must be considered for your business to run better than competitors’ businesses. By paying attention to the internal factors of strengths or strengths, you can consider what are the strengths of your business that can increase sales, and what resources can you get that other people can’t get.
2. Weaknesses
Apart from strengths or strengths, another internal factor that is an example of a SWOT analysis system is weakness. When building a business, you also need to consider what weaknesses your business has that need to be addressed. By knowing the weaknesses or weaknesses, you can also find out what caused your business to experience a decline in sales and what resources should be maximized.
3. Opportunities
The third example of opportunities or chances. Opportunities are external factors that also need to be considered to build a business. When building a business, you should be able to identify all the opportunities that can be taken to increase your business sales. By looking at the opportunities that exist, your business can do even better in the future.
4. Threats
Finally, some threats or threats are external factors that must be considered when building a business. Threats or threats are external factors that must always be taken into account because as an entrepreneur you must be sensitive to problems that can be obtained from outsiders.
Apart from that, you must also pay attention to threats that can come from resources within the company, as well as internal vulnerabilities that can also pose a serious threat to your company and business.
The Role of SWOT in Business Strategy
Samsung has been around for 84 years, Coca-Cola has been around for 130 years, and Harley-Davidson has been around for 119 years. From Indonesia alone, there is HM Sampoerna, which has been around for 108 years, as well as PT Semen Padang for 112 years, Sosro for 82 years, and many other companies.
You must have heard or read the story of one of these famous companies. Have you ever wondered how a company that has been around for decades to centuries keeps its reputation and even reaches the minds of consumers?
Undoubtedly, a mature business strategy is necessary for long-term survival. The company’s business strategy will be able to identify commercial opportunities and have reasonable expectations. One of the analytical methods to develop a business strategy is to use a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis.
When Albert Humphrey of the Stanford Research Institute was trying to understand why many business plans (marketing and business) could not be implemented, he developed a SWOT analysis as an assessment tool. Since then, SWOT analysis has been widely used to perform a strategic analysis of a project or business development.
Now is the time to evaluate each element and create a plan after capturing and identifying the strengths, weaknesses, opportunities, and threats of each organization or project. The analyses described above can be combined to create a strategy.
For example, if you combine strength – opportunities. Suppose you focus on environmentally friendly manufacturing and have proven patents for producing environmentally friendly goods.
Unlike competitors who are just starting with environmentally friendly claims, you can quickly leverage this opportunity to increase product sales as the trend toward using environmentally friendly materials emerges among the general public.
Benefits of SWOT Analysis
As explained above, the SWOT analysis system has advantages as a forward-looking strategy for business continuity. With SWOT, you can understand how to execute the mission strategy to achieve the business goals.
In addition, the SWOT analysis system is also useful to help stakeholders find out the state of internal factors and external factors of the company. SWOT also helps you determine the company’s key business professionals.
In other words, without information from the SWOT analysis system, market potential, interests, and existing opportunities cannot be identified. Therefore, it is very important to start implementing a SWOT analysis system for the smooth running of your business.
Conclusion of SWOT Analysis
From our explanation above, you can understand the SWOT analysis which is surely sustainable for both sides and can lead your business even better prepared.
From now on, let’s do a SWOT analysis so that the business is ready to grow by looking at the opportunities and threats that exist in developing a business.
We hope that the information provided in this article on SWOT can provide you with both benefits and the latest insights. Don’t forget to comment on this article and share this article on your social media so that more people can learn this information.