Article · 13 April 2016 · 2 min read · Katarzyna Kucia

SWOT analysis: why does it make sense? Learn the market analysis method

Most people have heard of SWOT analysis and have seen the matrix in which the factors affecting a company are carefully set out under four headings: Strengths, Weaknesses, Opportunities and Threats. SWOT is sometimes underestimated, perhaps because we first hear about it at secondary school. Yet using it makes it easier to build a well-organised development strategy for a company.

How is a SWOT analysis structured?

A SWOT analysis starts with internal factors, the company's strengths and weaknesses, and only against that background identifies opportunities and threats.

The SWOT analysis framework is designed to focus first on internal factors, which depend entirely on the company and the people who manage it.

To do the S and W stages really thoroughly, you need to look closely at each part of how the company operates. Spend extra time on less obvious and often underestimated areas, such as the standards the company has implemented or its knowledge management procedures. Today business processes must be optimised, and information and knowledge are a company's main capital. In the long term, these are the factors that may decide whether the company survives.

A careful analysis of the company's strengths and weaknesses also gives us a better understanding of its market environment. Only with this context in mind can you accurately identify the opportunities and threats the company faces.

It is easier to start by looking at the company as a whole, break it down into its basic components and only then analyse the industry we operate in. At this stage, another analytical method helps, and you will soon be able to read about it on our blog.