What Is SWOT Analysis?

Also known as DAFO analysis in Spanish and FOFA analysis in Portuguese, it is a powerful tool to know in a single view the circumstances that a brand or company faces in a certain place and time. It is a matrix of four segments where the positive and the negative are contrasted with the internal and external.

In Market Research they are usually used as a mechanism for the synthesis of findings found in previous phases, such as the review of secondary sources and interviews. They are very useful for risk reduction planning and crisis management. Below we list the four components of this instrument.

  1. Strengths. It is the result of the confluence of the positive and internal aspects of the subject under scrutiny. In this area, all those assets and intrinsic aspects such as experience, trajectory, prestige, installed capacity, public relations, client portfolio, intellectual and material properties, investments, etc. are usually listed.
  2. Opportunities. This area lists the positive and external aspects of the evaluated organization. Here we list the macroeconomic and macropolitical conditions that are favorable. We can also note in this item the acceptance of the product or service in the market, low competition, legal certainty and trade facilities.
  3. Weaknesses. In this segment, the negative and internal conditions of the moral person whom we evaluate are noted. Among the topics that we can consider in this area are the structure of the company’s staff, employee turnover, lack of knowledge of a market and the target customer, lack of critical data and information, high dependence on external providers, among others.
  4. Threats. Finally we have the confluence of negative and external aspects. We can include in this section the uncertainties in economic, legal, and political issues. There are also natural or man-made phenomena that can affect or slow down operations and logistics, such as earthquakes, fires, epidemics, wars and attacks; to cite just a few examples.

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