As part of your business planning process, conducting a SWOT Analysis is a MUST. But are you familiar with the term “SWOT Analysis”?
WHAT IS SWOT ANALYSIS?
SWOT analysis, also known as SWOT matrix, is a strategic planning technique businesses use to identify their strengths, weaknesses, opportunities, and threats related to business competition or project planning.
This technique is specifically designed for use in the preliminary stages of decision-making processes. Apart from this, it can also be used to evaluate the strategic position of organizations of any kind, from profit enterprises to NGOs, etc. It is meant to set out the business venture’s objectives or project and identify the favourable and unfavourable internal and external factors to achieve those objectives.
You can use SWOT to set actions for improvement. Here are a few questions that you must ask yourself while creating your SWOT analysis.
Strengths are the positive attributes of your company, things that are within your control.
- What are we really good at?
- Which business processes are successful?
- What are our unique skills?
- What assets do we have in our teams, such as education, knowledge, network, skills, and reputation?
- What are our physical assets, such as customers, technology, equipment, cash, and patents?
- What competitive advantages do we have over our competition?
Weaknesses are the negative factors you need to improve on to be competitive.
- What are the things that your business needs to be competitive?
- What are we really poor at?
- What business processes need improvement?
- What are our competitive disadvantages?
- Are there any tangible assets that we need, such as money or equipment?
- Are there any gaps in our team?
- Is our location ideal for our success?
- Are there resources that we are short of?
Opportunities are the factors in the business environment that contribute to your success.
- How can we improve our efficiency?
- Is the market growing, and are there trends that will encourage customers to buy more of our products/services?
- What new products/services/niches can be added?
- What are upcoming changes to regulations that can impact our company positively?
- What are the upcoming events that we can take advantage of to grow the business?
- Do our customers think highly of our brand?
Threats are external factors that are out of your control. However, you need to have a contingency plan to deal with threats if they occur.
- What are the regulations that are changing?
- Who are our potential competitors entering our market?
- Will suppliers always be supplying the raw materials that we need at the prices you need?
- What resources are challenging to get?
- Could future developments in technology become a challenge for our existing business?
- Is changing consumer behavior could negatively impact our business?
- Are the upcoming market trends can become a threat?
- What are our competitors doing to deal with the forthcoming market trends?
- Are some of our products/services losing demand?
BENEFITS OF SWOT ANALYSIS
The main advantage of performing a SWOT analysis is that it has no cost or doesn’t cost much – anyone who understands your business or industry can perform a SWOT analysis. You can also use a SWOT analysis when you don’t have much time to address a complex situation. This means you can take steps towards enhancing your business without the expense of an external consultant or business adviser.
Another benefit of a SWOT analysis is that it focuses on the most critical factors impacting your business. Using a SWOT, you can:
- understand your business better
- address weaknesses
- prevent threats and prepare you for future threats
- capitalise on opportunities
- take advantage of your strengths
- develop business goals and strategies.