What is SWOT analysis and how does it apply to your business?

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What is SWOT analysis and how does it apply to your business?

What is SWOT analysis and how does it apply to your business

What is SWOT analysis?

To run a successful business, you must regularly analyze your process to ensure you operate as efficiently as possible. There are many ways to assess your company, one of the most effective methods is to do SWOT analysis.

SWOT analysis consists of strength (strength), weakness (weakness), opportunities (opportunities), and threats (threats) which is a planning process that helps your company overcome the challenges and determine what must be addressed as a whole.

The main objective of the SWOT analysis is to help organizations develop full awareness of all the factors involved in business decision making.


This method was made in the 1960s by Albert Humphrey from the Stanford Research Institute, during the research conducted to identify why the company’s planning failed consistently. Since being made, SWOT has become one of the most useful tools for business owners to start and grow their company.

You must remember, it is impossible to map the future of small businesses accurately without first evaluating it from various angles that include a comprehensive view of all internal and external resources and threats, SWOT completes this in four steps that even beginner business owners can understand quickly.

Get to know the SWOT analysis process

We know that SWOT stands for Strengths, Weaknesses, Opportunities, and Threats – But what does each of these elements? Let’s look at each element one by one.


The first element of SWOT analysis is strength. Maybe you have guessed, this element discusses the things that your company or project is very well. This can be something intangible, such as your company’s brand attributes, or something more easily defined like a unique sales proposition of certain product lines.

It can also be with your people, your literal human resources: strong leadership, or a great engineering team.


After you know your strength, it’s time to change the critical self-awareness on your weaknesses. What is the inhibitor of your business or project? This element can include organizational challenges such as lack of skilled people and financial or budget limitations.

The SWOT analysis element can also include weaknesses in relation to other companies in your industry, such as the lack of USP which is clearly defined in the crowded market.


Next is an opportunity. Cannot offset the sales volume produced by your marketing team? That is an opportunity. Does your company develop innovative new ideas that will open a new market or demographic? That’s another opportunity.

Simply put, this element includes everything you can do to increase sales, grow as a company, or advance your organization’s mission.


The last element is a threat – everything is risky for your own company or the possibility of success or growth.

This can include things like new competitors, changes in regulatory laws, financial risks, and almost all other things that have the potential to endanger the future of your company or project.

When should you do a Swot analysis?

You can use the SWOT analysis before you commit to actions from the company’s plan, whether you are exploring new opportunities, improving internal policies, considering expanding or changing plans in the middle of the road through its implementation.

Sometimes it would be better to do general SWOT analysis just to check your current business landscape so you can improve business operations as needed in the future. This analysis can show the main part where your organization performs optimally, and which parts need to adjust.

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Don’t make a mistake by thinking about your business operations informally, with the hope that all problems will be resolved overall. By arranging SWOT analysis, you can see the entire picture of your business. From there, you can find a way to increase or eliminate the weaknesses of your company and take advantage of its strength.

While business owners must certainly be involved in making SWOT analysis, this will help to involve other team members in the process. Ask for input from various team members and accounts openly so that all contribute to each decision made. The collective knowledge of the team will allow you to analyze your business thoroughly from all parties.

SWOT analysis characteristics

SWOT analysis focuses on four elements, which allows companies to identify strengths that affect strategies, actions, or initiatives. Knowing these positive and negative elements can help companies more effectively communicate which part of a plan that needs to be recognized.

When drafting SWOT analysis, individuals usually make tables broken down into four columns to make a list of each element that has a side by side to comparison. Strengths and weaknesses usually will not match the opportunities and threats listed, even though they must correlate, because they are finally bound together.

By pairing external threats with internal weaknesses can highest the most serious problems faced by the company.

After you identify your risk, you can then decide whether it is most appropriate to eliminate internal weakness by assigning company resources to correct problems, or to reduce external threats by leaving business areas that are threatened and overcome them after strengthening your business.

Internal factors

Strength (s) and weakness (W) refer to internal factors, which are resources and experiences available for you.

These are some internal factors that are usually considered:

  • Financial resources (funding, sources of income and investment opportunities)
  • Physical resources (locations, facilities and equipment)
  • Human Resources (employees, volunteers and target audiences)
  • Access to natural resources, trademarks, patents, and copyright
  • The current process (employee program, department hierarchy and software system)

External factor

External power affects and affects every company, organization and individual. These factors are directly connected or indirectly with opportunities (O) or threats (t), it is important to be recorded and documented respectively.

External factors are usually things that you or your company cannot control, as follows:

  • Market trends (new products, technological advancements, and shift in audience requirements)
  • Economic trends (local, national and international financial trends)
  • Funding (Donations, Legislative and Other Resources)
  • Demography
  • Relations with suppliers and partners
  • Political, Environment and Economic Regulations

After you make your SWOT framework and fill in your SWOT analysis, you need to make several recommendations and strategies based on results. Linda Pophal, owner and CEO of the Strategic Communications consulting company, said this strategy must focus on increasing strength and opportunities to overcome weaknesses and threats.

“This is actually a strategy development area where the organization has the opportunity to be the most creative and where innovative ideas can arise, but only if the analysis has been prepared appropriately when starting the company’s planning,” said Pophal.

Example of SWOT analysis

Mr. Budi, the owner of the construction company PT. Construction gap, involved in creating SWOT analysis for the company. He provides an example used in the company’s decision to expand its practice including dispute mediation services. The SWOT matrix includes:

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  • Construction law firms with trained staff members in the field of law and professional engineering / general contractors.
  • Their experience benefits the company and customers
  • Because it still has a few employees so it can change and adapt quickly.


  • No one has become a mediator before or through any formal mediation training program.
  • One staff member has become part of mediation but not as a neutral party.


  • Most commercial construction contracts require mediation. Although there are hundreds of mediators on the market, only a few have actual construction experiences.
  • For smaller disputes, the mediator does not work as a team, only as an individual; Staff of PT. Construction gap can offer anyone with the advantages of neutral groups to evaluate disputes


  • Anyone can become a mediator, so that other construction law firms can open their own mediation services too.
  • Most potential clients have a negative impression on mediation, because they feel the mediator does not understand or care to understand the problem, and rush to solve it.

The strategy produced: Take a mediation course to eliminate weaknesses and launch the construction of the construction gap mediation, which uses the introduction of names with law firms, and highlights that the experience of construction legal and construction of the firm makes it different.

This SWOT analysis will force PT. Construction gap to systematically and objectively see what they have to do and what the market has to offer, then draw up their business plan to emphasize the advantage of the strongest features while utilizing opportunities based on market weaknesses.


Annoise business as a whole and sustainable is a must if your business wants to develop. With this SWOT analysis method, you can easily monitor and make a thorough improvisation in the business process.

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