Business SWOT Analysis
SWhat makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well-placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares. Here is our SWOT explanation.
More than this, by looking at yourself and your competitors using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors so that you can compete successfully in your market.
How to Use the Tool
Originated by Albert S Humphrey in the 1960s, the tool is as useful now as it was then. You can use it in two ways – as a simple icebreaker helping people get together to “kick-off” strategy formulation, or in a more sophisticated way as a serious strategy tool.
Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate to external factors. For this reason, SWOT is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix.
- What advantages does your organization have?
- What do you do better than anyone else?
- What unique or lowest-cost resources can you draw upon that others can’t?
- What do people in your market see as your strengths?
- What factors mean that you “get the sale”?
- What is your organization’s USP?
Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market.
Also, if you’re having any difficulty identifying strengths, try writing down a list of your organization’s characteristics. Some of these will hopefully be strengths!
When looking at your strengths, think about them in relation to your competitors. For example, if all of your competitors provide high-quality products, then a high-quality production process is not a strength in your organization’s market, it’s a necessity.
- What could you improve?
- What should you avoid?
- What are people in your market likely to see as weaknesses?
- What factors lose you sales?Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you don’t see? Are your competitors doing any better than you?
It’s best to be realistic now, and face any unpleasant truths as soon as possible.
- What good opportunities can you spot?
- What interesting trends are you aware of?
Useful opportunities can come from such things as:
- Changes in technology and markets on both a broad and narrow scale.
- Changes in government policy related to your field.
- Changes in social patterns, population profiles, lifestyle changes, and so on.
- Local events.
A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
- What obstacles do you face?
- What are your competitors doing?
- Are quality standards or specifications for your job, products or services changing?
- Is changing technology threatening your position?
- Do you have bad debt or cash-flow problems?
- Could any of your weaknesses seriously threaten your business?
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