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SWOT Analysis

The SWOT analysis consists of a process where weaknesses, threats, strengths and opportunities of a company are studied. Hence, the name it acquires.

It's a very important tool before carrying out any commercial strategy. In this sense, for a company to successfully carry out this strategy, it must first know the current situation of its company.

The objective of this analysis is that the company, from the information it obtains about its situation, can make the decisions or organizational changes that best adapt to the demands of the market and the economic environment.

SWOT analysis components

The SWOT analysis is based on two basic pillars:

- Internal analysis: Leadership, strategy, people working in the company, the resources they have and the processes should be called into question.

Within the internal analysis, the strengths and weaknesses of the company must be analyzed. The strengths will tell us the skills that the company has that make it different from its competitors. And on the contrary, the weaknesses will show us the factors that make us remain in an unfavorable position with respect to our competitors.

- External analysis: Market, sector and competition should be studied.

Within the external analysis, we will study the opportunities and threats. Within the possibilities we must take into account the possible future. That is, the new markets in which our company has a place. And, threats can alert us to the factors that may endanger the survival of our company.

Types of strategy to apply after SWOT analysis

Depending on the results obtained by the company after the SWOT analysis, you must apply a specific type of strategy. We can classify these strategies as offensive, defensive, for survival or for reorientation.

- Offensive strategies: Consists of generating higher returns thanks to your potential. That is, thanks to opportunities (internal factor) we seek to counteract weaknesses (external factor).
- Defensive strategies: It consists of reducing the risks generated by vulnerabilities. That is, reduce the risks caused by threats (external factor) based on your strengths (internal factor)
- Reorientation strategies: The idea is to correct weaknesses (internal factor) thanks to opportunities (external factor).
- Survival strategies: Strengthen your weaknesses to survive your threats.

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