Every business has its strengths and weaknesses. As a CEO, owner, or manager, you must know how to identify these things to make business decisions focused on improving your company. The best way to figure out what your business needs to level up is through SWOT analysis.
Defining the Acronym SWOT
The SWOT analysis is a business tool. It is an acronym for a business’s internal Strengths, Weaknesses, and external Opportunities, and Threats. By identifying the impact of internal and external factors, you can create an action plan to solve underlying issues in the business. Internal factors are elements within your control that affect your business. Meanwhile, external factors refer to things beyond your company’s control that impact your operations.
Conducting SWOT analysis every now and then is useful in creating well-informed decisions, problem-solving methods, and improvement techniques. Remember, before you can make any decisions, you must first conduct your SWOT analysis. The next segment teaches you how to get it done.
Specific Steps You Must Consider
Consider the following suggestions to guide you in your SWOT analysis. You can write things down or take digital notes for better clarity.
Step 1: Begin with an end in mind
When conducting your analysis, it is important to have a goal or objective as it will guide your analysis and decision-making. Ask yourself what you would like to get out of this analysis and what your purpose is. Are you introducing a new product? Re-branding? Or do you simply want to see where your business can improve overall? These are some of the many things to consider.
Step 2: Pay your Due Diligence
Before doing your SWOT analysis, research the following: the nature of your business, your niche, and the specific industry you belong in. Data collection may be through online methods or even crowdsourcing from colleagues and clients. If you are interested in introducing a new product or are just starting your brand, conduct market research to identify what target population your products or services would appeal to.
Step 3: Start with your Strengths
After having researched and identified your goal, it is time to list down your company’s strengths. Strengths are defined as your business’s intrinsic beneficial qualities, like cost efficiency, human resources, ideal location, and competitiveness.
Step 4: Acknowledge your Weaknesses
In business, honesty is vital to survival. List your business’ weaknesses as these can adversely affect your growth and revenue. A weakness is an intrinsic bad quality of your business. It may include low employee morale, a lack of new products, bad promotional material, or a declining market share. Be ruthless in listing your weaknesses. This analysis aims to see areas of improvement, and that can’t be done when the data is curated and filtered. Be merciless because external factors won’t be kind to you.
Step 5: List Potential Opportunities
List all external potential opportunities. Opportunities are relative depending on your business. An opportunity for your brand may be the downfall of another.
Opportunities refer to things that you may take advantage of to help your business in the future. Examples of these are technology, training and seminars, partnerships, and a diversified market.
Step 6: Take Down All Potential Threats
Threats are defined as problems that may arise and are harmful to your company. This includes an economic recession, increasing competition, inflation rates, and vicissitudes of the global market.
Step7: Analyze, Prioritize, and Strategize
After finishing your written analysis, go over all the items listed in each category and analyze the information. Identify trends and organize the information. From there, make a priority list of what needs to be addressed. Lastly, create a concrete plan of action to solve your priority concerns.
