How conducting a SWOT analysis can help your business
How conducting a SWOT analysis can help your business
Performing a SWOT analysis gives you a clear view of where your business stands. In the same time it will help yo identify and understand issues affecting your business. Have in mind it does not necessarily offer solutions.
Benefits of SWOT analysis
One of the main benefits is that it has little to no cost. Anyone who understands your business can perform it. This means that you, or a team member, can take steps for improving your business without the expense of hiring an external consultant.
Another benefit of conducting a SWOT analysis is that it focuses on the most important factors affecting your business. Using it, you can:
- understand your business better
- address weaknesses
- deter threats
- exploit opportunities
- take advantage of your strengths
- develop business goals and strategies for achieving them
SWOT analysis is only one stage of the business planning process. Researching and analyzing the areas your want to improve will follow.
Performing this analysis will only cover issues that can be considered strength, weakness, opportunity or threat. Because of this, it's difficult to address factors that could overlap, as some factors can be either a strength or a weakness or both. Also, keep in mind that a SWOT analysis will not be helpful in:
- prioritizing issues
- providing solutions or offer alternative decisions
- choose your best is idea
- not all information it produces is useful
How do you conduct a SWOT analysis?
There are various ways to conduct your SWOT analysis and it depends on your own stile of doing things. You have
Form your team
To get objective results gather people with different perspectives and stakes in your company. Management, sales, customer service, and even customers can all contribute valid insight.
The brainstorming is also a great opportunity to bring your team together. Having employees involved in this process may also help you get them easier on board on the strategy decisions that come out of the analysis.
Determine the goal
Decide on a key project or strategy you analyze and place it at the top of the page. Come back to this if you see that the discussion digresses.
Host a brainstorming session
Host a brainstorming session with your team. Start by listing strengths, weaknesses, opportunities, and threats together.
Write it all down
Include everything that comes up in each category and make sure you are not miss anything.
A SWOT analysis is typically conducted using a four-square SWOT analysis template, but you could also just make lists for each category. Use the method that makes it easiest for you to organize and understand the results.
Once you have all ideas down discuss how important each item on the list is. Rank them based on the impact you think it could have in your business.
If your team was there, ask everyone to choose their top three items for each category. Most likely, a pattern will emerge that will show you what to focus on.
If you are the only one working on the analysis, you probably already have the knowledge to assess what you need to consider.
Questions to get you started during a SWOT analysis
We have compiled a set of questions to help you get started with each section of your SWOT analysis.
Strengths (internal, positive factors)
Strengths describe the positive attributes, tangible and intangible, internal to your organization. They are within your control.
- What do you do well?
- What internal resources do you have? This could include:
- Positive attributes of people, such as knowledge, background, education, credentials, network, reputation, or skills
- Tangible assets of the company, such as capital, credit, existing customers or distribution channels, patents, or technology.
- What advantages do you have over your competition?
- Do you have strong research and development capabilities?
- Do you have positive aspects, internal to your business, add value or offer you a competitive advantage?
Weaknesses (internal, negative factors)
Weaknesses are aspects of your business that detract from the value you offer or place you at a competitive disadvantage. You need to enhance these areas in order to compete with your best competitor.
- What factors that are within your control detract from your ability to obtain or maintain a competitive edge?
- What areas need improvement to accomplish your objectives or compete with your strongest competitor?
- What does your business lack (for example, expertise or access to skills or technology)?
- Does your business have limited resources?
Opportunities (external, positive factors)
Opportunities are external attractive factors that represent reasons your business is likely to prosper.
- What opportunities exist in your market or the environment that you can benefit from?
- Is the perception of your business positive?
- Has there been recent market growth or have there been other changes in the market the create an opportunity?
- Is the opportunity ongoing, or is there just a window for it? In other words, how critical is your timing?
Threats (external, negative factors)
Threats include external factors beyond your control that could place your strategy, or the business itself, at risk. You have no control over these, but you may benefit by having contingency plans to address them if they should occur.
- Who are your existing or potential competitors?
- What factors beyond your control could place your business at risk?
- Are there challenges created by an unfavorable trend or development that may lead to deteriorating revenues or profits?
- What situations might threaten your marketing efforts?
- Has there been a significant change in supplier prices or the availability of raw materials?
- What about shifts in consumer behavior, the economy, or government regulations that could reduce your sales?
- Has a new product or technology been introduced that makes your products, equipment, or services obsolete?
Once you have identified and prioritized your SWOT results, you can use them to develop short-term and long-term strategies for your business.
Using the results to maximize the positive influences on your business and minimize the negative ones is the true value of this analysis.
SWOT analysis can have a key role in shaping your business strategy. It gives you a chance to see things from a new perspective.
It may lead to the discovery of a previously untapped niche in your market or help you to pinpoint an obstacle that could hinder your business’s growth.
As you reaffirm what your business’s strengths are and correct your weaknesses, you can use this to shape new opportunities and counteract the impact of external threats.