If you have an established business or you’re on the course to launch your start-up company, you need to do a SWOT analysis to help you develop your business strategy. A SWOT analysis is an incredibly simple, yet powerful tool for identifying and analysing an organization’s strengths, weaknesses, opportunities, and threats which is what makes up the SWOT acronym.
What is a SWOT Analysis?
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Corporate strengths and weaknesses are internal to your company, these are things that you have some control over and can change. Who is on your team, your patents and intellectual property, and your location are all examples.
Whereas opportunities and threats are external things that are going on outside your company, in the larger market. You can seize chances and defend against threats, but you can’t change the situation. Competitors, raw material pricing, and client shopping tendencies are all examples.
A SWOT analysis is a basic two-by-two grid that puts your top strengths, weaknesses, opportunities, and threats into an ordered list.
Why do a SWOT Analysis?
You’ll have a good approach for prioritising the tasks you need to perform to build your business if you take the time to do a SWOT analysis.
You may believe you already know everything you need to succeed, but a SWOT analysis will drive you to look at your company in fresh ways and from new perspectives. You’ll examine your strengths and limitations, as well as how you may use them to take advantage of market opportunities and threats.
Who should do a SWOT Analysis?
The founders and leaders of a company must be deeply involved in a SWOT analysis for it to be effective. This isn’t a job that can be handed off to someone else.
Company leaders, on the other hand, should not undertake the work on their own. To get the best results, gather a group of people with a variety of opinions on the company. Choose individuals that can represent various areas of your business, such as sales, customer service, marketing, and product development. At the table, everyone should have a place to sit.
Innovative companies even look outside their internal ranks when they perform a SWOT analysis and get input from customers to add their unique voice to the mix.
SWOT analysis is not difficult and if you’re running your own company, you can still manage to do a SWOT analysis. Request new perspectives from friends who are familiar with your industry, your accountant, or even vendors and suppliers. The trick is to have a variety of viewpoints.
A SWOT analysis can be used by existing firms to examine their current status and develop a strategy for moving forward. But keep in mind that things change all the time, so you’ll need to rethink your plan every six to twelve months, starting with a new SWOT analysis.
A SWOT analysis is an important aspect of the business planning process for start-ups. It will assist you in codifying a strategy so that you can get off on the proper foot and know where you want to go.
How to do a SWOT analysis the right way?
As we mentioned above you should gather a team of people to work on a SWOT analysis. It doesn’t have to be an all-day retreat, though. More than enough time should be one or two hours.
1. Gather the right people
Make a list of people from various parts of your firm and make sure that each department and team is represented. Different groups inside your company will have completely different perspectives, which will be essential to the success of your SWOT study.
2. Throw your ideas at the wall
There are right and wrong ways to do a SWOT analysis, just as there are right and wrong ways to conduct brainstorming meetings. To begin, we recommend giving everyone a pad of sticky notes and having them silently produce ideas on their own. This avoids groupthink and guarantees that everyone’s voice is heard.
Place all of the sticky notes on the wall and arrange related ideas together after five to ten minutes of quiet brainstorming. If someone else’s proposal generates a fresh concept, let anyone contribute additional notes at this point.
3. Rank the ideas
After you’ve sorted all of your ideas, it’s time to rank them. We prefer a voting system in which everyone is given five or ten “votes” to distribute as they see fit. This part of the exercise can be done with different coloured sticky dots.
You should have a prioritised list of suggestions based on the voting process. Naturally, the list is now open to debate and discussion, and someone in the room should be able to make the final decision on priority. The CEO is normally in charge of this, however, it could be someone else in charge of corporate strategy.
You’ll want to follow this process of generating ideas for each of the four quadrants of your SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats.
Questions that can help inspire your analysis
Here are some questions you may ask your team when conducting your SWOT analysis. These questions can help in the explanation of each part as well as stimulate creative thinking.
Strengths
Strengths are internal, positive attributes of your company. These are things that are within your control.
- What business processes are successful?
- What assets do you have in your teams? (ie. knowledge, education, network, skills, and reputation)
- What physical assets do you have, such as customers, equipment, technology, cash, and patents?
- What competitive advantages do you have over your competition?
Weaknesses
Weaknesses are negative factors that take away from your strengths. These are areas where you may need to improve in order to stay competitive.
- Are there things that your business needs to be competitive?
- What business processes need improvement?
- Are there tangible assets that your company needs, such as money or equipment?
- Are there gaps on your team?
- Is your location ideal for your success?
Opportunities
Opportunities are external factors in your business environment that are likely to contribute to your success.
- Is your market growth and trends will encourage people to buy more of what you are selling?
- Are there upcoming events that your company may be able to take advantage of to grow the business?
- Are there upcoming changes to regulations that might impact your company positively?
- Do customers think highly of you if your business is up and running?
Threats
Threats are external factors that have no control over. You may want to consider putting in place contingency plans for dealing with them if they occur.
- Do you have potential competitors who may enter your market?
- Will suppliers always be able to supply the raw materials you need at the prices you need?
- Could future developments in technology change how you do business?
- Is consumer behaviour changing in a way that could negatively impact your business?
- Are there market trends that could become a threat?
Using a SWOT analysis
A SWOT analysis should be used to help an entity, whether it is a company or a person, acquire insight into its current and future position in the marketplace or against a stated goal.
Because entities can recognise competitive advantages, favourable prospects, as well as present and potential difficulties, they may build plans to capitalise on the positives while addressing the negatives.
To put it another way, after the SWOT variables have been discovered, decision-makers should be better able to determine whether a project, effort, or product is worth pursuing and what is required to make it successful. As a result, the analysis is designed to assist a company in matching its resources to the competitive operational environment.
SWOT analysis pros and cons
SWOT analysis can help decision-making by providing a visual picture of the numerous aspects that are most likely to influence whether a company, project, initiative, or individual can reach a goal.
A SWOT analysis has limitations, despite its importance in comprehending the numerous aspects that influence performance. The analysis may not take into account all relevant factors for each of the four elements, resulting in a distorted viewpoint. Furthermore, because it only captures factors at a specific point in time and does not account for how those aspects may change over time, the information SWOT provides has a finite shelf life.
Summing-up
The SWOT analysis is a straightforward yet thorough method for identifying not just an action plan’s flaws and threats, but also its strengths and chances. A SWOT analysis, on the other hand, is just one instrument in your business plan. PEST analysis (political, economic, social, and technical), MOST analysis (mission, objective, strategies, and tactics), and SCRS analysis are more analytic tools to consider (strategy, current state, requirements, and solution).
The most excellent way to maintain track of growth, strengths, and weaknesses is to do regular company analysis and strategic planning. To study and execute strategies in a more balanced, in-depth manner, use a number of analysis methodologies, such as SWOT, in your decision-making process.
If you need help with designing a SWOT analysis program for your company, you can speak to the marketing experts at Shergroup. Each of our marketing team members is skilled and experienced in their vertical and know-how to tackle challenges that come their way.
You can get on a 121 call with one of our experts and discuss the Strengths, Weaknesses, Opportunities, and Threats in your business and after analysing we will plan a SWOT analysis for your business.
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