SWOT Analysis: The First Step in Creating a Great Strategy in Islamic Financial Institutions

Abstract

SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a strategic tool that is often used to evaluate an organization's position as a whole. By analyzing internal strengths and weaknesses, as well as external opportunities and threats, organizations can understand their strategic conditions amidst business dynamics. This study aims to examine the role of SWOT analysis as an initial step in effective business strategy planning. The results show that SWOT analysis helps organizations identify competitive advantages that can be utilized to achieve long-term goals. In addition, internal weaknesses found through this analysis can be the basis for making improvements and developments. External opportunities, such as technological advances or new market trends, can be utilized for innovation, while threats, such as competition or regulatory changes, can be anticipated through careful planning. However, SWOT analysis has limitations. This tool only provides an overview and does not cover specific priorities or implementation steps. Therefore, integration with other analysis tools, such as PESTEL or Porter's Five Forces, is needed to support more in-depth decision making. By combining SWOT with other analysis methods, organizations can design strategies that are adaptive, responsive, and relevant. This study emphasizes that SWOT is an important initial step in creating a superior and sustainable business strategy.