Facts about a SWOT Analysis
Whether you are building a new business or you are running an existing business, you will require a SWOT analysis along the way. This is a simple and powerful tool that will make it easy to develop sound business strategies.
What is a SWOT Analysis?
S and W, stand for strengths and weaknesses. These are things that you can control within the company, they are internal matters and you can change them. They include business location, assets, and your team.
O and T, stand for opportunities and threats. You don’t have control over these because they are external to your business; you can’t change them. Your business should take advantage of the various opportunities while being shielded from threats. Examples are shopping trends, raw material prices, and competitors.
- By undertaking a SWOT analysis, you will organize your top opportunities, threats, weaknesses, and strengths into a list. This will help in strategizing and in decision-making.
Who Should Carry Out a SWOT Analysis?
For a successful SWOT analysis, company leadership and management should be deeply involved every step of the way.
- However, company leadership shouldn’t monopolize the process; they shouldn’t work alone. For a successful process, they should form a team made of people who have different perspectives about the company. There should be people from different departments to represent different aspects of the company. Select people should be picked from finance, product development, marketing, and customer service among other departments.
- An innovative company can even look beyond the internal ranks when performing a SWOT analysis. They can obtain input from customers. Clients can provide unique insights and perspectives that cannot be found within the company.
If you are running an enterprise on your own, it is still possible to undertake a SWOT analysis. You can recruit friends who know something about your business to provide additional viewpoints. You can even involve your accountant, customers, suppliers, and vendors.
An existing business should use a SWOT analysis to evaluate the current situation and come up with a way forward.
The business world is dynamic; therefore, things are constantly changing. That means that you have to constantly reassess your business strategy; a new SWOT analysis should be carried out every six to twelve months.
A startup should undertake a SWOT analysis as part of the planning process. Doing so will help to solidify strategy making a new business start on the right footing. According to startup statistics, most startups that undertake a SWOT analysis usually succeed.
Elements of a SWOT Analysis
These are the things that you do well. They are the elements that separate you from competitors. Internal resources such as top products and skilled personnel make up your strengths. Tangible and intangible assets including vehicles, land, buildings, and intellectual properties are also strengths.
These are negative factors that dilute your strengths. You need to improve on your weaknesses to stay competitive.
Weaknesses can delay the growth of your business. They include limited resources, areas competitors outsmart you, and qualities that you don’t possess.
When thinking about weaknesses, ask yourself questions. Is your business location suitable for success?
Does your company have all the tangible assets required for seamless operation? Are there business processes that can be improved? Are there steps you can take to make your business competitive?
Are there market opportunities? Are there trends? Opportunities could also include an increase in demand for your products and having fewer competitors.
Threats will hinder the survival and growth of your brand. A threat is anything that poses a risk to the success of your brand.
Threats include negative media coverage, an increase in competitors, changes in regulation, and changing customer attitudes toward your products.
How to Do SWOT Analysis Right
You need a team to work together on the SWOT analysis. An all-day retreat is not necessary to develop it. Less than two hours will be enough.
- Have the right people
Collect people from different departments. Ensure that every part of the company is represented. Different groups will have different perspectives that will make developing the SWOT analysis successful.
- Private Brainstorming
To start things off, have everyone generate their own ideas. Give everyone five to ten minutes of private brainstorming and let them record ideas on sticky notes. After that, hang all sticky notes on the wall, similar ideas should be grouped together.
- Rank Ideas
With all ideas organized, it is time to rank them. You can have a voting system. Based on the results of the voting, there should be a prioritized list of ideas. This list will need to be debated and discussed. Leadership will make decisions.
With a SWOT analysis, you will get a picture of the strengths and weaknesses of your business. You will also obtain insights into threats and opportunities confronting your business.
A SWOT analysis done right will help you know more about the market and industry. This will help you to launch the right strategies that will increase sales and give you a competitive advantage.
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