Definition of SWOT Analysis:
A SWOT analysis is defined as a framework for evaluating a company’s competitive position, identifying its strengths and weaknesses, and identifying opportunities and threats that it may face. Also known as the SWOT matrix or SWOT analysis tool, this analysis is not limited to projects but has found its way into many other areas such as marketing, develop individuals, and business management. The emergence of this analysis can be traced back to experts at Stanford University, conducted between 1960 and 1970 under the direction of Albert Humphrey to find out why joint planning failed, the resulting economic problems, and how to solve them. This analysis applies to short-term and long-term business plans, and is a basic assessment of what project management can and cannot do, as well as the potential opportunities and threats that it may face later.
Importance of SWOT Analysis:
The SWOT analysis takes the task of helping the project to improve its position in the market because its importance stems from the fact that it works on:
- Demonstrate strengths and use them to achieve project goals.
- Show weaknesses and work to correct them and benefit from them.
- Recognizing and capitalizing on opportunities during project development.
- Find potential threats to the project and work to avoid them.
- Developing project alternatives, complementary plans, and emergency arrangements.
- Develop creative and distinctive marketing strategies.
- Preparing the risk management plan for the project.
- It helps to measure the performance of the project compared to competitors in the market.
- Understand and identify tools to help improve project performance.
SWOT analysis is used in the strategic planning process because it is an important tool for exploring where the opportunities for success and threats lie.
Elements of a SWOT Analysis:
SWOT analysis is an abbreviation for four English words, which represent the elements on which the analysis is based. Which:
- Strengths
- Weaknesses
- Opportunities
- Threats
The strengths:
The strengths refer to the core competitiveness of the project, the factors that may make the project more likely to succeed, and also include the businesses and areas in which the project can compete in the market, Such as: strong brand, advanced technology, high budget and strong customer base.
The weaknesses:
Weaknesses refer to factors that may reduce project performance to suboptimal levels. Once a weakness is identified, project managers must take serious steps to reduce its impact and turn it into the strength of the project.
Opportunities:
Opportunities are external factors that project management can exploit to increase its market power and allow projects to increase profitability and productivity. For example, if a country’s tariffs are lowered, this is a great opportunity for project managers to export their projects to new markets.
Threats:
They are factors that can harm projects and if these threats are identified then it becomes easier for the management to deal with them.
Tips for a successful SWOT analysis:
- Identify and classify external and internal factors.
- Reliance on facts and avoid doubt and belief.
- The accuracy of the information and figures collected.
- Compatibility and clarity in priorities.
- Determine the overall project objectives that are affected by the SWOT analysis.
- Accurately identify strengths, weaknesses, opportunities and threats.
In short, there is no denying the importance of SWOT analysis and its results for business strategy and development. At this stage, every project manager must know and understand the project, its elements and steps, and strive to implement it accurately to achieve the greatest possible benefit for himself and his project.