The DOFA matrix is a method that allows analyzing both the environment and the business and their interactions, that is, it allows working with all the information that can be obtained.
DOFA, SWOT or SWOT, whatever you want to call it, is a multi-application tool that can be used by all departments of the organization at different levels, to analyze different aspects, including: new product, new product-market, product, product-market, product line, strategic business unit, division, company, group, etc.
A judicious, reality-adjusted DOFA analysis provides excellent information for decision-making in the market area, for example, allows for a better perspective before embarking on a new product project.
DOFA must make an objective comparison between the company and its competition to determine strengths and weaknesses, and a broad and in-depth exploration of the environment must be carried out to identify the opportunities and threats that arise.
Success factors. When doing the DOFA you have to focus on the determining aspects of the business, on its key factors of success or failure.
In accordance with the above, DOFA analysis has two focuses, on the one hand it focuses on the company itself (internal focus) and on the other, it does so in its environment (external focus).
When looking for key aspects internally, what is sought is to determine the factors on which one can act directly, while doing external analysis seeks to identify factors that affect the business (call it a product, strategic business unit, product line, etc..), positively or negatively, in order to enhance or minimize them according to their effect.
When the internal analysis is undertaken, all the aspects that are handled in the organization, human resources, physical resources, financial resources, technical and technological resources, risks, etc. must be considered, the questions to be answered are of the following type:
- What aspects differentiate me from the competition? In what do I overcome it? In which are we equal? In which ones does it surpass me?
By answering these types of questions, the strengths and weaknesses will be known.
Competitive advantage is only sustainable when after all competition attempts to imitate it cease to exist
The strengths are classified into:
- Common: when a fortress is owned by several companies or when several are capable of implementing it. Distinctive: when the same fortress is owned by a small number of competitors, they are those that generate competitive advantages and higher performance than the industrial average. They are hardly susceptible to copying or imitation when they are based on complex social structures that cannot be understood by competition or when their development occurs through a unique situation that the others cannot follow. enhance the distinctive strengths of others.
Weaknesses basically refer to competitive disadvantages, which arise when no value-generating strategies are implemented that competitors do implement.
When carrying out the external analysis, all the elements of the production chain, demographic, cultural, political and institutional aspects must be considered. Questions such as:
- In which areas is it difficult to achieve high performance and in which could it be possible to generate high performance? What are the barriers that prevent this product from achieving its market participation goals?
DOFA is especially important for the marketing area due to external analysis since it considers the market, its potential and the aspects on which it could influence in order to produce rewards for our initiatives.
