Are you trying to perform a current situation analysis but don't know where to start?
If so, try a swot analysis! I'm showing you how. So stick around.
Hey Doc Squad! Dr. White here with the Business Analysis Doctor. Today I'm giving you a tutorial
on the swot analysis but before we get started if you want more business analysis training and tips
be sure to subscribe and click on the notification bell. Now let's get started.
A swot analysis is a commonly used strategic planning and management technique but can
also be a very powerful business analysis tool for getting context on the current situation.
All right so today we're going to look at what a swot analysis is we'll look at the main components
of a swot analysis then we'll look at an example of a swot analysis using Apple as our case study.
And then finally we'll go over how to create and use a swot analysis.
So what is a swot analysis? Swot analysis is an assessment of the organization's strengths,
weaknesses, opportunities, and threats while considering both internal and external factors.
SWOT is commonly used to evaluate an organization's
current environment identify options to meet an organization's objectives and
also to identify potential success barriers and create action plans to overcome those barriers.
So the main components of a swot analysis include strengths, weaknesses,
opportunities, threats, and quadrants. Now let's take a closer look at each of
these elements. Strengths are the internal capabilities that the organization does
well. They may include experienced employees, financial resources, effective processes,
advanced technology, customer relationships,
or any other internal factor that is contributing to the organization's success or competitiveness.
Weaknesses Weaknesses
are the internal factors or activities that the organization does poorly or not at all.
These may include legacy processes outdated systems unreliable or unskilled employees poor
customer service or any factor that impedes the future growth and development of the organization.
Opportunities Opportunities are the external factors that the
organization may be able to use to increase its competitive advantage future growth or development
these may include emerging markets technology breakthroughs competitors exiting the market
or other factors that the organization could take advantage of.
Threats Threats are external factors
that can negatively impact the organization's ability to grow and develop. They can include
factors such as new competitors in the market, economic downturns, reduced market demand,
or other factors that could negatively impact the organization.
Quadrants So as you can see,
there are four quadrants that compose the swap but there are also four categories from which
each of the quadrants is derived. So let's take a look at each of these quadrant categories.
Internal quadrants - these are the quadrants in the swot analysis
that the organization has direct control over and therefore these are more actionable.
This includes the strengths and weaknesses.
External quadrants These are the quadrants that the organization has
no direct control over and can only be monitored. These include opportunities and threats.
now let's look at the helpful quadrants these are the quadrants in the swot analysis that represent
factors that increase the organization's ability to achieve its goals and objectives
or may be favorable to the company in terms of competitive advantage strengths and
opportunities are considered to be helpful quadrants and these should be maximized
harmful quadrants these are the quadrats in the swot that represent factors that
may hinder the organization from achieving its goals and objectives
or it may represent items that pose as oppositions to the organization overall
and as you can see weaknesses and threats are considered to be harmful these should be minimized
Now let's look at an activity called quadrant linking
Linking involves pairing items from the internal quadrants to items in the external
quadrants. This is often performed in the TOWS analysis. A TOWS analysis is really the next
step once the swot analysis is complete. While swot analysis assesses the current situation
the TOWS starts to consider the strategic approach for addressing the opportunities for improvement.
Since only the items in the internal quadrants are actionable they are paired with the external
quadrants to facilitate an actionable plan. For optimal results, there should be an equal
number of items listed in each quadrant. For example, four strengths, four weaknesses, four
opportunities, and four threats. Linking generally occurs as weaknesses to threats or wt and this
asks how will our weaknesses expose us to threats in the market and what is the worst-case scenario?
Then we link strengths to threats
and this asks how will we use our strengths to reduce or prevent threats?
Then we look at weaknesses to opportunities and we consider how our weaknesses impede potential
opportunities or how can opportunities mitigate our weaknesses? And finally, we'll link strengths
to opportunities. Here we'll ask how can we use our strengths to take advantage of opportunities?
Now let's look at an example of a swot analysis using Apple.
This information came from the business strategy hub based on their most recent analysis of the
company. Apple strengths apple's strengths include being one of the most valuable brands
apple is ranked the number one position for the ninth consecutive year
by Interbrand with a brand value of 408 billion.
Apple is also globally iconic. Apple is one of the most reliable companies
when it comes to personalized advanced computers and smart technology devices.
Apple also uses top technology. Apple was the first to introduce some of the most innovative
products that have changed the world such as iPhones, iPads, and AirPods. Apple is also a brand
of choice. Professionals prefer high-performance technologies such as a MacBook Pro
or Ipad for visual design animation and video production as well as other creative work.
And Apple also uses proficient research and development. Apple executes careful
study and extensive research in order to understand customer needs and market trends.
Now let's take a look at apple's weaknesses
The first is their high-priced products
apple's products may be considered a luxury due to their premium prices. The products are priced
for middle and high-income consumers. Low-income consumers can't simply afford apple products.
Apple also has limited advertisement and promotions apple has solidified
their grounds by establishing loyal customers. Even with limited advertisement and resources,
apple's marketing relies heavily on its iconic and flagship retail stores.
Apple is also entering an area of non-competency.
Apple is rapidly expanding into new services such as video content streaming game streaming payment
services competing with dominant players such as Netflix, Disney, Citi, Chase, and PayPal.
Apple products often are incompatible with other software apple products do
not support other software or technology, making it incompatible with other devices.
Customers have to exclusively purchase Apple apps or accessories to continue using their products.
And also allegations of tracking apple has been accused of using tracking apps on its phones,
which reveal the precise location of users.
Now let's look at opportunities Consistent customer growth.
Apple has been dominating the technology sector for years now they provide top quality
and cutting edge technology that offers a breakthrough in customer experience.
Qualified professionals. Apple's researchers, developers,
and product specialists are a team of highly qualified professionals that
has years of experience in branding consumer products. With the expansion of their team,
apple can continuously build new opportunities. Apple has an expansive distribution network
apple can generate higher revenue and sales if it focuses on
creating an expansive distribution network. There's also a lack of green technology.
Apple has yet to launch products that are created using green technology the company
has not implemented or participated in creating sustainable technology that is eco-friendly.
Smart wearable technology. Smart wearable technology will soon dominate the world. According
to Forbes, it will become a 27 billion-plus dollar market with 233 million unit sales.
Now let's consider apple's threats
The coronavirus outbreak - Apple is highly dependent on China for its manufacturing and
supply chain the recent events have significantly affected the distribution of its operations.
Supply chain disruption - while apple's air tags are meant to help people find frequently
misplaced items using Bluetooth the technology is also being used with malicious intent. There have
been a lot of instances where criminals have used air tags to steal cars and worse stalk people.
Another threat is the fact that Apple is bullied by counterfeits.
Apple has become vulnerable to third-world countries illegally utilizing the brand
image to sell counterfeit products. Another threat is the increase in competition
although apple is a brand that has solidified itself it still faces threats from competitors.
With the advancement in technology brands such as Samsung, Google,
and Dell are giving apple some tough competition. And then market penetration - there's been a
significant change in the market penetration by other brands in the smartphone market.
Companies like Samsung, and HTC are using android software to create new smartphones.
Now let's look at how to create and use a swot analysis
First, identify relevant internal and external stakeholders to build a swat team next
level set the group on what each of the four quadrants represents.
Then brainstorm to identify the elements that need to be in each of the quadrants
then you should add data or in-depth information to support the elements identified with more
formal approaches such as PESTLE. If you want more information on the PESTLE analysis,
see the video on the end screen and I'll also leave a link in the description.
Next, you'll need to break down and synthesize the information into key themes. After that,
you'll want to link the internal quadrants to the external quadrants using a TOWS analysis.
Then you'll need to use the links to build out a strategic plan with goals
objectives and a roadmap to increase the organization's competitive advantage.
And finally, you'll need to execute or act on the strategic plan
and the roadmap in order to achieve the results. One of the most common misuses of
the SWOT is that organizations often perform the analysis but fail to execute on the action plan.
Well, there you have it! This is how you create and use the SWOT analysis technique.
If you learned something new, tell me about in the comments. I'd love to hear your feedback.
Also, be sure to check out all the business analysis and BA certification training and
resources we have for you at thebadoc.com! Thank you so much for watching.
Have a productive and prosperous day and I'll see you next time! Bye now!