A successful business begins with a clear set of values, goals, and strategies for how they operate. However, every industry goes through constant changes and is always evolving.
Therefore, organizations use tools like a SWOT Analysis to plan for the best possible future!
SWOT Analysis: An Incredible Tool for Business
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT Analysis, therefore, is a tool for assessing these four aspects of an organization or business.
A SWOT Analysis is a very simple yet incredibly effective tool if used to its full advantage. Understanding the specifics of your business from every angle and understanding what to promote and what needs some work will only help you grow and achieve more success in your industry!
A SWOT Analysis can also be a safety measure that reduces your risk of failure in significant decision-making processes. This tool highlights your organization’s best advantages while also bringing to light potential threats that could play a factor in your upcoming projects.
Even more, this analysis technique can help you define what makes your organization unique amongst your competitors, and you can hone the aspects of your business that make you stand out in your industry.
How To Perform a SWOT Analysis
To perform a SWOT analysis, first gather members of your organization from every level and team. The more information you have from all angles and efforts within your business the more effective your analysis will be!
The analysis begins with a SWOT template, which is a square diagram divided into four quadrants. Simply put, draw a large square, and then divide it in half both horizontally and vertically.
Label each section of this template with one of the four aspects of SWOT: Strengths, Weaknesses, etc. Then it’s time for the brainstorming to begin.
Encourage every member of your gathered team to begin reflecting on their roles, teams, and visions of the business as a whole. Each time you identify a SWOT characteristic, write it into the appropriate category on the chart.
Breaking Down the Four SWOT Categories
As your team brainstorms ideas to put into each SWOT category, discuss the basics of each aspect to guide and focus the discussion.
SWOT strengths and weaknesses are generally internal factors, whereas opportunities and threats are generally external factors. Your organization’s assets, processes, and people fall into strengths and weaknesses, whereas changes in the market, industry competition, and the economy are considered opportunities and threats.
Strengths are obviously things your business does well, or things that make your organization unique. This should be internally focused.
What makes your company “tick?” What do you do better than others? What drives your business?
If you can’t prove it, it’s not a strength. It’s likely that the “strength” is something aspirational.
Weaknesses are areas to improve. Remember to encourage honesty when discussing your weaknesses—a SWOT Analysis is only effective if the information gathered is accurate and truthful. Again, weaknesses should be internally focused.
What systems, procedures, or resources are hindering your success? What weaknesses do your competitors see when they view your business?
Opportunities are openings or inspiration that arise from external situations. This category generally leads to new and evolving goals within your business.
What interesting market trends are you aware of? How can you use recent changes in social patterns and lifestyles in your audiences?
Threats are negative outside influences, such as supply chain problems, shifts in market requirements, or a shortage of recruits. This category should include situations that are currently affecting the business as well as foreseeable problems to begin fixing current issues as well as preventing them in the future.
These SWOT definitions and open-ended questions can spark the brainstorming of your analysis or help guide team members when filling out the chart.
How to Use Your SWOT Analysis
After your team has filled the SWOT chart, it’s time to use this valuable information to your advantage and create new goals.
Your analysis will give you a long list of potential actions to take, including boosting your strengths, staving off threats, and taking risks on found opportunities.
Use the rest of the chart when approaching these actions that you have defined. What strengths should you utilize when approaching that new opportunity? What potential threats could take advantage of your weaknesses, and how can you use your strengths to stop them?
Remember to make clear and defined goals for your business instead of abstract ones. Instead of making a goal to “get more customers,” make a goal to “gain 1000 new users on our website and increase conversions by 10% by the end of the following month.”
Plotting these goals on your company calendar with specific dates will make your goals and the efforts to achieve them more tangible and inspiring!
A Successful Business Starts with Strategy
A SWOT Analysis will force you to reevaluate the goals, strengths, and weaknesses of your company to better define your road to success.
At Strategy, we sit down with our clients and perform analyses like this with each new project. We understand that each industry and business is unique, and we are equipped to help you reach each of your newfound goals.
Add us into your Strengths category and we will help you challenge Threats and Weaknesses while forging ahead to tackle new, glorious Opportunities! Contact us today!