SWOT Analysis: check out how this strategy can leverage your business

One of the great challenges of every entrepreneur is to understand which internal and external factors are most relevant to their company. One of the ways to have this control is through the Swot Analysis, an indispensable tool for the efficient and safe management of a business.

Through this strategy, it is possible to map and monitor indicators of the company’s internal and external environment. With this, the entrepreneur will know which are the main points where greater investment and greater attention from the board are needed.

In the Swot Analysis, we divided the indicators into 4 categories, two from the internal environment (strengths and weaknesses) and two from the external environment (opportunities and threats).

If you want to implement professional and strategic management in your business, check out how to analyze and monitor each of these indicators below!

Strengths and Weaknesses

When starting the Swot Analysis, it is important to pay attention to internal factors. The strengths are the company’s positive indicators, that is, those where the company is a reference or stands out. Weaknesses are the negative indicators of the company, that is, those where the company has the greatest deficiency and/or the greatest difficulty in developing, that is, they are characteristics that can serve as barriers to its evolution and that need to be worked on.

Several indicators can be mapped as strengths or weaknesses, from Marketing skills such as company reputation, customer satisfaction, customer retention, campaign efficiency, among others, to financial skills, such as average ticket, cost of capital and financial stability .

The mapping must be done in 2 ways: one indicating the degree of importance of such indicator, and another indicating the performance of that same indicator in the company. In this way, the entrepreneur will know what his priorities are and what factors can be directed to a second moment.

To carry out this analysis, it is necessary to have a global view of the organization and have access to KPIs and quantitative and qualitative measurement data of the company. Therefore, it is necessary to gather as much data as possible before carrying out the analysis, so that the result is in line with the reality in which the company finds itself.

The SWOT analysis is a simple and expressive form, which serves as a starting point for the strategic engagement of your business management, however, it should be noted that the implementation of the OKR methodology in a second moment could be a watershed for the general alignment across the company, from shareholders to employees, about the organization’s business goals and objectives.

With strengths and weaknesses mapped out, it’s time to look at the external environment.

opportunities and threats

In the swot analysis, it is important that the entrepreneur has a diagnosis of the external environment, that is, the environment in which the company is inserted but does not have control.

In this context, it is important to clarify that here we are not only referring to competitors and the market, but also to government, society, cultural trends, fiscal policies, institutional and political crises, and everything else that may be relevant to a strategic analysis.

Opportunities consist of facts that occur in the external environment and can be used by the company in some way. Taking advantage of these trends is a way to often work on the weaknesses and enhance the strengths of your business.

Threats are external factors that may cause some kind of problem to your business at the present time or in the future. Being aware of these factors and thinking in advance about strategies to minimize their impacts is extremely important to maintain the company’s stability in the market.

Opportunities and threats can be mapped through the analysis of macroenvironments, a way of recognizing unmet needs and trends, as well as studying indicators from different areas of society.

Check below the six macroenvironmental forces and how to analyze them:

Demographic macroenvironment

It consists of breakdowns and demographic data, such as population size and growth rate, distribution of age groups, among others. These indicators are important to know, for example, where your audience is.

If you have a network of women’s fashion stores, for example, and intend to expand it to other cities, it is necessary to carry out a demographic assessment, because if the cities have a very small number of women compared to men, perhaps the store will not attract such a large audience in the region.

Economic macroenvironment

Every businessman needs to be aware of his public’s purchasing power, and this factor is directly influenced by economic indicators, such as percentage of income, indebtedness and the possibility of credit for the population.

If you have a retail store whose predominant target audience belongs to class C, for example, you need to be aware of the economic factors that influence this class. If there is a considerable increase in the number of debtors in this class, it is necessary for the company to think of strategies to circumvent this threat, such as sales promotions and greater payment facilities.

sociocultural Macro Environment

In this Macro Environment we see the importance of interpreting the culture of the place where the company is or will be inserted. Cultural habits vary greatly from region to region, and what the inhabitants of one place value may not be valued by the inhabitants of another region.

An example of a company that studies this macro Environment very well is the McDonald’s fast food chain. Present in several countries around the world, the brand reinvents itself in each region, adapting its product portfolio and its structure according to the local culture without losing its essence. This makes the brand able to please people from different cultures.

natural macroenvironment

Natural factors are points that companies need to pay attention to. Sustainability practices are increasingly common in the corporate environment and have become great opportunities for brands to attach value to their products and services.

Another point is related to threats. If you own a company in the food industry, for example, it is necessary to understand the natural production cycle of each raw material, in order to know which times of the year are most favorable for the production of each food, and thus have purchase and stock control. more assertive.

Technological macroenvironment

In a world where technology has revolutionized different types of markets, it is always necessary to be aware of all the trends in this area in order not to make your business outdated.

In this macroenvironment, great opportunities and threats arise all the time. As a good use of technological opportunities, we can cite the Apple brand as an example, as it invests heavily in research and innovation to provide its customers with the most modern products through its products.

As a technological threat, we can mention the case of Kodak. The company at the time had a great opportunity at hand, which was to be the first brand to launch a digital camera. However, he decided to ignore this opportunity to continue selling photographic films, which yielded good revenue for the company at the time. In this way, other brands went ahead of Kodak and launched their digital cameras on the market, and what was once an opportunity became a threat to the company, which ended up becoming outdated before its main competitors.

Political-legal macroenvironment

This macroenvironment encompasses laws and government agencies that govern a society. All companies are subject to tax laws and obligations, which may change over time. These legal changes can present an opportunity or a threat to the business.

The tobacco market, for example, was one of the most affected by laws in recent years with a series of restrictions related to advertising, showing the influence that this macro environment can have on a business.

With the strengths, weaknesses, opportunities and threats traced correctly, you will have in your hands a roadmap that will guide your company’s next steps. With the Swot Analysis completed, it’s time to draw up an action plan to enhance strengths, improve weaknesses, take advantage of opportunities and minimize threats.

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