Having completed a SWOT analysis, you will get a clear picture of the position of your personal business in the market. It will also help to identify and understand issues affecting the business and future prospects.
The benefits of SWOT analysis
One of the main advantages is that it doesn’t cost anything. This can be done by every employee of the company who understands business conditions. This means that you or a team member can improve your business without incurring the cost of hiring outside consultants.
Another advantage of the SWOT analysis is that it focuses on the factors that mainly affect the performance of the company. With it you can:
- Better understand your own business.
- Pay attention to his weaknesses.
- Avoid future threats.
- Take advantage of undiscovered opportunities.
- Use exclusively strengths.
- Develop business goals and strategies to achieve.
SWOT analysis is only one step in the business planning process. The next step is to research and analyze areas of the business that need to be improved.
SWOT analysis covers only those issues that can be considered as strengths, weaknesses, opportunities or threats. For this reason, it is difficult to identify factors that are not clear enough or do not fall into any of these categories. Also, keep in mind that a SWOT analysis will not be helpful:
- Prioritize issues.
- Looking for solutions or alternatives.
- Selecting an idea.
- Not all of the information it offers is useful.
How to do a SWOT analysis?
Since there is no single way to conduct a SWOT analysis, you have enough freedom to improvise and adapt it to your personal needs and business.
Create a team
To get objective results, bring together people with different views and positions. Management, sales, customer service, and even customers will definitely offer valuable information.
Collective brainstorming is also considered a way to bring a team together. Involving employees in this process helps to convey to them the importance of this analysis and the strategic decisions made during it.
Have a clear purpose
First, decide what you will analyze. Is it a project, a strategy or an entire company? Write the topic of analysis at the top of the page and always come back to it if you think the discussion has deviated from the main topic.
Generate ideas collectively
Lead the collective generation of ideas with your team. First list and write down in a general list all your strengths, weaknesses, opportunities and threats.
Write everything down
Include everything mentioned in each category and make sure you don’t miss anything.
Evaluate every idea
After listing all the ideas, discuss the importance of each. Rate each idea with a score (for example, from 1 to 10). The greater the potential impact of an idea on a business, the higher the score should be.
If you did this analysis with a team, ask everyone to pick the top three ideas from each category. Ideas that deserve the most attention are likely to be repeated the most. If you are working on an analysis alone, you know what to pay attention to.
Questions to start your SWOT analysis with
Here is a list of questions that will help with each category of SWOT analysis.
Strengths (internal, positive factors)
Strengths describe the positive, tangible and intangible internal features of your organization. You can control them.
- What areas do you think you are strong in?
- What internal resources are there?
- What is the competitive advantage?
- Do you have a lot of experience in research and development of new products?
- Are there positive qualities that add value or competitive advantage?
Weaknesses (internal, negative factors)
Weaknesses are aspects of the business that reduce the value you offer or reduce your competitive advantage. These are areas that need to be strengthened to keep the business competitive.
- What factors that you control negatively affect your ability to gain or maintain a competitive advantage?
- Which areas need to be improved in order to meet the set goals or compete successfully with a strong competitor?
- What is the company lacking (for example, experience or access to talented employees and the latest technology)?
- Does the company have limited resources?
- Opportunities (external, positive factors)
- Opportunities describe external factors that can help a business thrive.
- What are the market or environmental opportunities you can take advantage of?
- Is the company getting positive feedback?
- Has there been any recent growth in the market or any other changes that could create new opportunities?
- Is the opportunity permanent or changing and requiring quick decisions?
Threats (external, negative factors)
Threats include external factors and factors beyond your control that could compromise the strategy or the business itself. You have no control over them, but with the right planning, you can be prepared for them.
- Who are your current and potential competitors?
- What factors beyond your control could put your business at risk?
- Are there problems caused by unfavorable market trends or actions that could lead to lower revenue or earnings in the future?
- What situations can jeopardize marketing efforts?
- Have supplier prices or raw material availability changed?
- What about changes in consumer behavior, the economy, or government laws that could reduce future sales?
- Has a new product or technology been recently introduced that could make your existing products, equipment or services less competitive?
Once you have identified and prioritized your SWOT list, you can start using it to develop short and long term business strategies. The true value of this analysis lies in amplifying and using the positive factors and, at the same time, in planning how to avoid the negative factors.
