What is a SWOT analysis?
A SWOT analysis is a tool that can help you identify the internal and external factors affecting your business. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats.
How does a SWOT analysis help a business?
A SWOT analysis is a often used in business strategic planning. By identifying your business’ core strengths, weaknesses, opportunities and threats it can help you to understand what your advantages are, what you are lacking, your market and competitors. It is as great way to help you identify key areas that you might need to focus on and visualise work that you need to do to grow your business.
SWOT analyses are also a useful tool in the marketing planning process.
How to perform a SWOT analysis.
When performing a SWOT analysis, identify strengths and weaknesses that are internal to your business. This means things that you have control over, such as your location, employees and intellectual property. Keep in mind what your business does well and what gives you a competitive advantage over your competitors.
The opportunities and threats component of the SWOT analysis are those that are external to your business. Try to identify opportunities in your market that you can benefit from. When identifying threats, think of things that are happening in your market which are out of your control. For example, competitors, raw material prices, shifts in consumer behaviour or changes to government regulations.
It may be a good idea to conduct the SWOT analysis with a group of people in your business. The exercise provides an opportunity to encourage team work and participation. Moreover, each person may bring a different perspective, which can be very helpful.
You can brainstorm as a group and identify each section of the SWOT analysis or let individuals complete their own analysis using bullet points then come together as a group to discuss the results. You can then form a final version of the analysis and prioritise what needs to be done for the business.