Is the competition crowding in your space, stealing customers and overshadowing your products with their own?
Are you thinking of jumping into a new industry but hesitant for the move?
A fully explored SWOT analysis provides insight into business challenges, changes, and alterations. This type of analysis examines strengths, weaknesses, opportunities, and threats on a specific topic.
It can be used to research a company as a whole. Or you can narrow down and focus on new products, launches, marketing, or operations, for example.
Here’s how to utilize SWOT analysis in business
In business, strengths (or the ‘S’ in SWOT) highlights internal positives within the firm. You examine the state of your unique selling positions, marketing campaigns, communication methods, sales, and current standing of products on the market.
Consider this a list of things doing well in your company. It’s what gives you an edge over the competition. And while it’s good to note what’s working, now that you have the list, you should create a plan to expand upon these strengths.
Consider the issues that are straining your business. These are weak links that plague you of success. The issues can be difficult to see on your own. Or more so, it can be difficult to go into detail about weaknesses without feeling shame or despair.
While you can do this part of the SWOT analysis for your business on your own, it may be beneficial to have an outside party document weaknesses. This is one of the many things business analysts can offer when hired.
The reason behind listing all weaknesses is because they must be handled for your business to flourish. Weaknesses grow when left to fester on their own. And what may be a small problem now could implode in the future.
For example, delays in invoicing customers is a slight problem. But if it takes weeks for a single invoice to get to the customer, they become irritated and move to the competition. Loss of customers is a big problem.
You can also gauge how impactful the weaknesses are in the business and create a plan of action based on priority.
Unlike strengths and weaknesses in SWOT analysis, opportunities are external. At this stage of the analysis, you want to gauge outside sources — media, public relations, online — to help you expand business plans, meet objectives and create new strengths in the long run.
Internal threats can be issues in communication amongst team leaders, the threat of labor disputes, lack of funding/investors for new product launches.
External threats can be related to the government, political issues, the environment, changes in buying behaviors and more.
SWOT analysis completed incorrectly…
When done incorrectly, SWOT analysis may lead you to make wrongful decisions that negatively affect your business. The external analysis — particularly with opportunities and threats — will lead you astray if inaccurate.
SWOT analysis takes time and preferably data, which will be wasted if these decisions are the false ones.
But when a SWOT analysis in business is used correctly, it can help make strategic decisions that will benefit the overall health of the company. It contributes to identifying strengths to build upon while accenting weaknesses to fix over time.
Additionally, you can maximize the potential of opportunities and create a plan of action to reduce threat impact.