How to Conduct a Proper SWOT Analysis for a Business
One way to seize potential business opportunities and avoid future threats as a business is by conducting SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. It helps businesses have a complete analysis of their strengths and weaknesses.
Before delving in on conducting a SWOT analysis for your business, it is necessary to have a thorough understanding of everything it entails.
What Is SWOT Analysis?
The word SWOT is an acronym for four words which are Strengths, Weaknesses, Opportunities, and Threats. Swot analysis makes use of techniques to define your business in the aforementioned angles. In other words, SWOT analysis is used by a business to determine the alignment of the business with its success yardstick. Also, it measures the performance of a project with respect to its laid down projections.
The SWOT Analysis Process
This element of the SWOT analysis points out areas of the business that are really thriving. It can range from attributes peculiar to your business to something as simple as a unique selling proposition. The ability to recognize these areas of strength will help the business focus more and also find a way to build upon those strengths.
When measuring strengths, a few questions should be taken into consideration which are:
- What has been identified as your strength by your customer?
- What is the competitive advantage your business has compared to competitors?
- What is your business really good at?
- What major resources does your business have?
Answering the aforementioned questions will help in analyzing the Strength part of your SWOT analysis.
Once the strength of your business has been figured out, it is time to carry out a critical analysis on the weakness as well. Find out elements that are holding your business back. These elements might include lack of or shortage of skilled workers, financial constraints, amongst several others.
Opportunity here refers to options available out there for your business. These are spaces in the market place where your business operates within. They are external factors i.e. trends, fluctuations in the market place, etc.
When analyzing opportunities, it is very vital to put the business’ strengths and weaknesses into consideration. Moreover, not all opportunities might be right for the business at a particular point in time.
This is the last step in the SWOT analysis process. It is an assessment of how the business will react to potential threats that might arise. Threats in this regard might include government regulations, fluctuations in market and people’s perception etc.
The aim of the threat element is to determine potential threats and carry out necessary measures to eliminate them. In a case where such threats cannot be completely eradicated, effects should at least be brought to minimal.
How To Conduct the SWOT Analysis
There are several approaches when it comes to the SWOT analysis. However, each and every one is governed by a set of laid down structures. Below are tips on how to conduct a SWOT analysis for your business.
- Bear in mind the core objectives of your business when performing your SWOT analysis.
- Keep your SWOT diagram as brief as possible. Ensure you include only the important details with not too many explanations.
- In a situation where you have employees who operate across different areas, it is essential to seek their contributions as this can provide some insight.
- Customers feedbacks will also provide much needed insight, getting them will go a long way.
- Bullets should be neatly ordered with the most important details coming top while the least important come afterwards.
Acting Upon Your SWOT Analysis
As soon as you have been able to identify the strengths and weaknesses of your business as well as the opportunities and threats, everything begins to take a new form.
Once your SWOT analysis has been completed, you should try to match your business strength with its opportunities. Furthermore, the weaknesses should be converted into strengths.
Acting on Strengths
Acting on your strengths involves an analysis of everything that makes your business stand out and capitalizing on it. This is your selling point as a business and should be well utilized. For instance, if excellent customer relationship is your strength, this will mean nurturing such relationship so as to strengthen the bond.
In a nutshell, strength involves doing what you have always been good at.
Acting on Weaknesses
This can be quite complicated to work with as you have to be completely honest in admitting the weaknesses are there.
While acting on weaknesses can be quite challenging, it might not be easy owning up to their existence. However, there is need to, as it will help going forward.
In analyzing your weaknesses, you might come to realize more ways in which these can be improved upon. What you lack in weaknesses, you might be able to make up for in strengths which your competitions might be unable to beat.
Acting on Opportunities
Amongst all the elements present in the SWOT analysis, the opportunity section is the part where actions can be taken. Identifying opportunities helps you to evaluate the strengths of your business, this in return will help you know what target to aim for.
Acting on Threats
Now this part right here can be the most challenging on the SWOT list. Mitigating damages that can result from threats can be way beyond your control. However, this isn’t to say all hope is completely lost. You should find every means possible to monitor and respond to these threats. Dealing with them should be top on your priority.
There might be instances where crossovers will occur between your opportunities and threats. All it requires is for you to find possible means of seizing such opportunities and reducing the threats at the same time.
Having a SWOT analysis for your business will require an update on a regular basis, i.e. annually. In a case where your business faces some major challenges or experiences some growth-related problem, then it has to be updated more frequently. This will help you know how well your Strengths, Weaknesses, Opportunities, and Threats have shifted and also find a balance.