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SWOT analysis

Yaroslav Zhmikhov
Yaroslav Zhmikhov
114 November, 5, 2021 4 min read
114 November, 5, 2021 4 min read

UX DESIGN PROCESS: 5 OUT OF 21

It is a process that is used for strategic planning and identifying Strengths and Weaknesses as well as Opportunities and Threats. It is also being used in addition to Competitor analysis.

SWOT analysis is a tool for strategic planning which helps make research of both internal and external environments.
An example of SWOT analysis for an online e-learning platform

The purpose of SWOT analysis

To discover Strengths and Weaknesses in an internal environment (within the company) as well as Opportunities and Threats from the external environment, which may cause a negative impact.

Value for the team

This methodology will help evaluate the strengths and weaknesses of the business, find new opportunities, and identify possible threats.

Value for the business

Minimize chances of making mistakes, help fairly evaluate everything in the industry and adapt to a new reality, summarize work results for a certain period (changes), evaluate risks before a major change in the business model.

Duration:

  • Preparation: up to 30 minutes
  • Main activity: from 4 to 6 hours

Creating process:

Step 1. Strengths of the company are its strong points (internal environment, negative impact (S)), the things the company is particularly good at, or which make it different from others. In general, absolutely any aspect of the company that brings it a clear advantage is a strength.

You need to think about:

  • Competitive advantages (staff motivation, knowledge, education, skills, access to certain materials or a clear and successful business process or plan, etc.).
  • Bonus system (customers, equipment, technology, finance, unique trade offer, etc.).

Step 2. Weaknesses are the weak points of the company (internal environment, negative impact (W)). These are the factors that inhibit the company’s growth in the process of moving towards the achievement of strategic goals, for example, interfere with profits growth. At the same time, you need to be able to distinguish between weaknesses (which directly depend on the actions of the company) and threats (which do not depend on the company’s actions).

You need to think about:

  • Things that prevent businesses from being competitive (for example, insufficiently qualified employees who need to attend courses).
  • Processes in the company that need improvement (for example, training of new employees).
  • Funding that business needs to continue development (for example, opening a new branch in a foreign country).
  • Staffing of the whole team (for example, investment in new iMacs).
  • Company location (for example, it may not be suitable or convenient for business).

Step 3. Opportunities are the company’s potential capabilities (external environment, positive impact (O)). It is necessary to take into account all aspects that are somehow related to market development or the actions of competitors, that is - these are factors which the company cannot directly influence, but from which it can benefit if it implements certain actions in the short and medium-term.

You need to think about:

  • The market in which the company operates and its growth (for example, new technology release that can reduce the cost of the product).
  • Performing on events in which the company can sponsor or partner (it will increase brand promotion in the market).
  • Changes in the market or in the legislation of the country, which might affect the business positively.

Step 4. Threats of the company (external environment, negative impact (T)) are all aspects that depend on the opinion of the target audience or the actions of customers. In other words, these are the circumstances that inevitably occur against the will or actions of the company’s management. This point is very important because the ability to define the threats gives an understanding of how to do business properly to maintain the maximum customer base.

You need to think about:

  • Potential competitors that can enter the market of customer services (for example, in Lviv there was only an Uber taxi, and then it changed to Uber, Uklon, and Bolt).
  • Whether the contractors, suppliers, and partners are reliable;
    Possibility of digitalizing of other companies that may in some way negatively affect the business development.
  • Some possible changes in the behavior of the target audience;
    The risks of fading the trend in your specific business.

Example: SWOT analysis


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