The SWOT analysis is a Situation analysis for companies, which should serve to find a strategy regarding the positioning of the services offered. It is often used as part of a marketing strategy and, as an important part of the business plan, also plays an important role in applications for funding. The abbreviation “SWOT” stands for the English words strengths, weaknesses, opportunities and threats. Translated into German, these mean something like: strengths, weaknesses, opportunities, risks.
The analysis deals with the internal and external perspective of a company and puts them in touch. This makes it possible to develop a strategy through which one can match one’s own strengths and weaknesses with the situation on the market and the associated opportunities and threats.
SWOT analysis process
- Objective, written comparison of the strengths and weaknesses of your own company and its performance (internal analysis).
- Examination of the current market situation and determination of foreseeable trends as precisely as possible. By comparing them with your own strengths and weaknesses (step 1), both opportunities and risks of your own business model can be identified (external analysis).
- Defining a strategy that uses various measures to make better use of the opportunities offered by your own business model and reduce foreseeable risks.
For a better understanding of the SWOT analysis, there are the following matrix: