The four elements of SWOT analysis create an easy-to-follow framework that businesses of all sizes can use to assess the current and potential health of their respective enterprises. The knowledge that a company can gain from SWOT analysis can aid in the planning and development of existing and future entrepreneurial strategies. Use these four steps as a basis for your research, and you’ll get rewarded with a more comprehensive and applicable overview of your business which can lead to accelerated growth, added resilience and maximized profits.
Find the positives. Analyse your organization and make a note of everything that you do well. Scour your records for examples of profitable periods and lucrative areas of your business and try to discern what makes them successful. If you can ascertain which elements of your operation work well, you can later focus on replicating or expanding them.
Assess your organization from the standpoint of a potential customer. Try to gauge what aspects of your company they would value highly and what would make them choose it over the competition. If you can pinpoint the traits that would influence a customer’s decision to choose your business over others, you’ll be able to identify your strongest attributes easily.
A business’s strengths can lie in many different areas, ranging from organizational structure to end product. Often, a company’s biggest advantage is its unique selling point. Why is your operation or product different to other options on the market?
Having already defined your biggest strengths, compiling a list of weaknesses should be relatively easy. Most aspects of your enterprise that aren’t clear strengths could justifiably be described as weaknesses upon which you could potentially improve. Review your business practices and figures for the last year or two and highlight any areas that haven’t performed as well as you would like.
It is again beneficial to approach your analysis from the viewpoint of a potential customer. What reasons would they have for choosing a competitor’s services over your own? Review the practices of other businesses and contrast their successes to yours. If they are growing at a faster rate or attracting a more substantial number of customers, ask yourself why.
With an extensive understanding of your business’s strengths and weakness, you will be better placed to judge the potential of any opportunities that present themselves. When reviewing legislative, technological or societal changes, consider how well your business could adapt and exploit the situation by recognizing your strengths and weaknesses as they pertain to the evolving entrepreneurial landscape.
Consider your strengths to judge how quickly you could capitalize on an opportunity before committing time and resources to it. Likewise, consider your weaknesses when gauging your ability to adapt to new scenarios. If you don’t think your business is currently strong enough to fully exploit a situation, decide whether it makes more financial sense to address your weaknesses straight away or to abandon the opportunity altogether.
Threats to your business could manifest themselves as anything from rising costs to decreasing demand or increased competition. Again, the research of your strengths and weaknesses will play a vital role in your ability to gauge your adaptability and resilience to change. Always be aware of threats to the health of your organization. When they present themselves, assess the situation by applying your knowledge of the health of your enterprise.
Threats can appear from many different sources, so it’s essential to make a concerted effort to stay informed at all times. Stay abreast of relevant technological or political changes by subscribing to industry-specific media and continually reviewing your processes and policies. If you can identify a threat early, you will be more likely to weather any storm it may bring.
The efficacy of SWOT analysis lies in its simplicity. The four necessary steps enable all businesses to review their entrepreneurial present and future, identify and resolve issues more quickly and build upon strengths to facilitate future growth. The ease and applicability of SWOT analysis have made it a mainstay of business review processes around the world.