We are experiencing a historical moment that will surely affect our work. In this time of silence, tragedy, and hope each of us has thoughts with which he tries to live the moment by imagining how to start again or what to change.
Here in this context, I came up with the idea of proposing a strategic business analysis tool, used by company management, by project managers as decision-making and predictive tools for new projects. With this type of approach, ideas and strategies can be rethought to face the new economic and life challenges that are changing before our eyes with more enthusiasm.
I’m talking about the SWOT analysis. This type of analysis was created by an American economist Albert Humphrey in the 1960s and has since spread widely.
This approach can be used for any decision-making process in which there is an objective to be achieved, for example, the choice of a Supply Chain system, a Crm system, a system for managing the process Workflow, a system for management of KPIs, etc.
All this and more are strategic actions. The first choice could be to pursue internal development, rather than to buy and customize a commercial solution.
Another strategic choice that a company could face is whether or not to enter a new market. Evaluate what are the factors for and against this choice, evaluating, with the Swot method, the strategies with your strengths and weaknesses taking into account external threats.
It is designed using a matrix, in which the internal and external factors that have a negative or positive potential in the activity to be carried out are defined.
The acronym SWOT stands for
ts The first two points (Strengths and Weaknesses) describe the internal factors of the company.
The other two (Opportunities and Threats) describe external or exogenous factors.
All the positive traits that characterize your business will be included in the “strengths” area, distinguishing it from competitors. How does your company excel? What makes it unique? What are its best qualities?
The weak points, as it is easy to imagine, are the aspects in which one is most lacking. What are your areas of improvement? How are your competitors better?
Opportunities are the possibilities offered by the market that are potentially beneficial for your business. It is easy to guess that they vary according to the reference market and the company objectives, but it is important to know how to grasp them to understand what actions to put in place to exploit them.
Finally, threats include all possible obstacles that could prevent the realization of your business idea. The launch of a new competing product or service, market regulations, and so on: anything that can get in the way of your plans.
Below is a generic example of a Swot matrix in order to improve organization and business efficiency and market positioning. After defining the strengths, weaknesses, opportunities and threats on the sides, we move on to strategies by crossing internal and external forces. It is clear that the strategies must be developed in detail, but all this allows you to immediately become aware of your strengths and weaknesses.
In summary, the areas of strengths and weaknesses are inserted, strategies are developed to evaluate how I can fight threats with defined strengths and weaknesses, or rather how I can manage opportunities with company strengths and of weakness.
Advantages and disadvantages
- The in-depth analysis of the context guides the definition of the strategies.
- The verification of correspondence between strategy and needs allows to improve effectiveness.
- It allows you to reach a consensus on strategies (if all parties involved in the intervention participate in the analysis).
- Risk of subjective procedures by the evaluation team in selecting actions.
- It can describe reality too simplistically.
- If it is not implemented in a collaborative context, there is a risk of disconnection between the theoretical and programmatic plan.
This approach helps to elaborate pros and cons, highlighting all the positive and negative aspects of a project. With the information collected by a SWOT Analysis it is easier to understand whether to proceed and how to move.