SWOT analysis helps in developing a solid business strategy by considering the strengths and weaknesses of your business and the opportunities and threats that you might face in the marketplace.
If you are conducting a SWOT analysis of your business, you will come to know that it is a lot more fun than it sounds.
It helps to think of your business in a new and creative way and the best thing is it does not take much time.
WHAT IS A SWOT ANALYSIS?
S.W.O.T is a condensation which stands for:
A planned and prearranged list of the strengths, weaknesses, opportunities, and threats of your business is known as SWOT analysis.
In a company, the internal elements like patents, reputation, location come under the category of strengths and weaknesses. These can be changed with time with some sort of work and efforts.
Whereas, the external elements like prices, competitors, suppliers come under the category of opportunities and threats. These are unchangeable whether you are in favour of them or against them.
If you already have an organization then you can use SWOT analysis if you want to evaluate the changes in the environment and to respond proactively.
If you are going to build up a new organization, then SWOT analysis should be used as a part of your planning process. If you are able to think about your new venture in relation to its unique SWOTs, it will help you to put yourself and your business on the right track and save yourself from a lot of troubles in the future.
WANT TO CONDUCT A SWOT ANALYSIS? LEARN HOW TO DO IT.
If the SWOT analysis is conducted by people who have different perceptions and stakes in the company, then you will be able to get the most desired results. Visions of management, customer service, and customers can be considered. SWOT analysis is considered to be an opportunity which helps in bringing all the people together and forming a team to participate in the strategies of the company.
You can start the analysis with a brainstorming session and by making a 4 square SWOT analysis template. The next step is to ask the members of the team to complete the template individually and at last, discuss and compile the results.
When you are done with brainstorming, you can create a final report of the analysis by listing all the factors in each category on the basis of the priorities starting from top to lowest.
You can also study the 7 P’s of marketing mix and service marketing mix. It will help you to understand that what are the stages that your product will go through and understand the market trends to do the analysis in a better way.
WHAT QUESTIONS SHOULD BE ASKED DURING A SWOT ANALYSIS?
There are so many questions that you can ask for. Following is a list of some of the questions that can help you to get started:
Strengths: It includes internal and optimistic factors. You can control these factors as these are internal to your organization.
- What are the areas in which you have done well?
- What internal resources do your company possess?
- As compared to your competitors, what advantages do you have over them?
- Do your organization possess manufacturing and R&D facilities?
- What are the other internal factors that can add value?
- Strong brand name
- Use of new technology
- Access to various distribution networks
Weaknesses: These includes internal and negative factors. These factors are responsible for placing you at a competitive disadvantage.
- What are the factors that you can control in an easier way to obtain a competitive advantage?
- In order to achieve some goals, what are the areas in which you can improve?
- What are the elements that your organization lack?
- Does your business have adequate resources?
- Is the location of your business poor?
- Poor goodwill
- Weak brand name
- No or less access to distribution networks
- The absence of patent protection
- Cost of raw material is high
Opportunities: It includes the factors which denote the reasons your organization is likely to flourish.
- What opportunities are present in the market that can provide benefit to you and your organization?
- Does your business have positive insight?
- Are there any changes in the market that can act as an opportunity for you?
- Are the opportunities present in the market ongoing or one time?
- Recognizing new market sectors.
- Better technology
- Acquisition and merger
- Elimination of international trade barriers
Threats: These include the external factors that you cannot control. These factors are responsible for placing your business and its strategies at risk.
- Who are the prevailing competitors?
- What are the factors that are responsible for placing your business at risk?
- What are the factors that can threaten the efforts of your marketing efforts?
- Is there any change in the prices and the availability of the raw materials?
- Is there any new technology or product that has made your products and services outdated?
- Decrease in supplies due to natural disasters
- New rules and regulations
- Changes in the needs and tastes of the customers
- Increase in trade barriers.
Once you are able to identify and rank the results of SWOT analysis, you can develop both short- term and long- term strategies for your business.
The main aim of this exercise is to enhance the positive impacts on your organization and minimize the negative ones.