A SWOT analysis is a tool for documenting internal strengths (S) and weaknesses (W) in your business, as well as external opportunities (O) and threats (T). You can use this information in your business planning to help achieve your goals.
To get the most out of your SWOT analysis, you should have a question or objective in mind from the start. For example, you could use a SWOT analysis to help you decide if you should introduce a new product or service, or change your processes.
Before you begin the SWOT analysis you need to do some research to understand your business, industry and market. Get a range of perspectives by talking to your staff, business partners and clients. Also conduct some market research and find out about your competitors.
The first step is to identify and list what you think are your business’s strengths. Examples could include strengths relating to employees, financial resources, your business location, cost advantages and competitiveness.
The next step in the analysis is to list things in your business that you consider to be weaknesses. Examples of some typical weaknesses could include an absence of new products, high staff turnover, and declining market share.
It is important to address the weaknesses raised in your SWOT analysis. The list of weaknesses can indicate how your business has grown over time. When you review the SWOT analysis after a year, you may notice that your weaknesses have been resolved. While you may find new weaknesses, the fact that the old ones are gone is a sign of progress.
After identifying your weaknesses, now you need to spend some time evaluating your potential opportunities. Think about the possible external opportunities for your business. Opportunities could include new technology, training programs, partnerships, a diverse marketplace or a change of government policy.
The final step in the SWOT Analysis processes is to create a list of potential threats to your business. Some examples of threats could include rising unemployment, increasing competition, higher interest rates and the uncertainty of global markets.
When you have completed the steps above, you will have 4 separate lists. Ideally, these lists can be displayed side-by-side so you can have an overall picture of how your business is running and what issues you need to address. You can then work out what issues are the most important and what can be dealt with later.
Review your 4 separate SWOT lists by asking these important questions:
- How can we use our strengths to take advantage of the opportunities identified?
- How can we use these strengths to overcome the threats identified?
- What do we need to do to overcome the identified weaknesses in order to take advantage of the opportunities?
- How will we minimize our weaknesses to overcome the identified threats?
Once you have answered these questions and finalized your SWOT lists, you can now use the SWOT Analysis to develop strategies for achieving your business marketing goals.