If you are new in the business or someone who is planning to scale, SWOT analysis is something you should be familiar with.
If you are just stuck at one point in your business and planning to go on a new venture, conducting a SWOT analysis will make it easier for you do decide whether or not to move forward.
What is SWOT Analysis?
A SWOT analysis is a powerful tool to analyze your business, whether you are building a new startup or revamping your existing business.
SWOT stands for Strength, Weaknesses, Opportunity and Threats.
Strength and Weaknesses are internal factors, something which you can control. Opportunity and threats are external factors, something which would exist even if your business didn’t.
A SWOT analysis organizes your to strengths, weaknesses, opportunities and threats into an organized list and represented by a simple 2×2 column grid.
When you carry out a careful analysis, you will be equipped with a solid framework and strategy to take your business forward. Prioritizing the work that needs to be done and protect your business from the possible threats.
Since you deal with your business and market conditions everyday, you may assume that you know everything about your business. But a SWOT analysis will force you to visualize your business in a new way. You will look at your strengths and weaknesses and find a way to grab new opportunities and avoid threats.
How to Do a SWOT Analysis?
SWOT analysis is a team activity. You need to gather a team of members from different departments and make sure you have representation from every aspect of your business.
People from the different department will make sure you get different perspectives that will be critical in making a SWOT analysis.
Arranging a SWOT analysis is similar to a brainstorming session. Gather all the team members and ask them to come up with ideas, suggestions, opportunities and threats.
Once you get multiple points under each section, rank these ideas based on their usefulness or priority.
Repeat this procedure until you get enough ideas in all four quadrants of a SWOT analysis.
Questions that can help you with Analysis
There are a few questions you can ask your team members when doing a SWOT analysis. Those questions can help you narrow down your thinking and spark creativity.
To Analyze Strength: Strength is the positive attribute of your company. Things which you can control.
- What business process is more efficient?
- How are you different from your competitor?
- What resource/knowledge does your company have which other’s doesn’t?
- What assets do you have tools, customers, equipment, the technology which is performing better?
To Analyze Weaknesses: Weaknesses are negative factors which keeps you away from achieving your goal.
- Which department is the least efficient?
- What are the processes that need to be optimized?
- What is that your competitor is doing better than you?
- What resources do you lack?
To Analyze Opportunities: These are the external factors which the market must be experiencing and can contribute to your success
- Is there any event/festival near which could benefit your business?
- Are there any changes in regulation which could change the way you do business?
- The current market trends that can be capitalized for your benefit?
- Do you have a large base of loyal customers?
To Analyze Threats: These are the external factors against which you need to have some contingency planned.
- Does new technology bring a threat to your business?
- Does your customer behaviour change with new technology?
- Is there a new competitor entering the market?
- Can any market trend become a threat?
- Are your vendors/raw material suppliers adequate for future demands?
Who Should Do a SWOT Analysis?
For a SWOT analysis to be successful, a company’s top leaders should be deeply involved along with the management and executives.
If you are starting a new business, you may not have any reference points. You can start by asking your friends who are into similar domains, your vendors, past customers, accountants. The point is to have different perspectives.
If you are an existing business, you can still carry out the SWOT analysis. This will help you solidify your strategy. But remember that you’ve got to repeat this process at regular intervals.
Innovative companies could hire a third party to carry out the SWOT analysis. The third-party services exclusively gather information from different segments of your company including your customers. This way you can get an all-round perspective of what’s working and what’s not for your business.
What’s Next?
With your SWOT analysis in hand, you can now create a strategy to propel your business forward.
First, analyze your strength and see how you can leverage these to gain more exposure in the market and avoid possible threats. Next, attack your weaknesses and bring efficiency where necessary.
With an action plan in mind, set up goals and milestones that you would like to achieve in a known span of time.
If you think that analyzing and creating a strategy is a bit overwhelming or you need assistance in creating a strategy, you can always contact us through the given contact form. Radon Media is well-versed with a wide spectrum of business and would love to give you a necessary consult.
