Business SWOT Analysis
What makes SWOT a really powerful technique is that it can help you identify and eliminate threats to your business and well as find new opportunities. It also helps you build a strategy to distinguish yourself from your competitors.
How to Do a SWOT Analysis
Originated by Albert S. Humphrey in the 1960s, you can use it in two ways – as a simple icebreaker helping people get together to "kick off" strategy formulation, or in a more sophisticated way as a serious strategy tool.
A SWOT template is simply a large piece of paper divided into 4 equal sections headed up Strengths, Weaknesses, Opportunities and Threats. Once you’ve prepared your template, use it to answer the following:
· What advantages does your organisation have?
· What do you do better than anyone else?
· What unique or lowest-cost resources can you draw upon that others can't?
· What do people in your market see as your strengths?
· What factors mean that you "get the sale"?
· What is your Unique Selling Proposition (USP)?
Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market.
Also, if you're having any difficulty identifying strengths, try writing down a list of your organisation's characteristics. Some of these will hopefully be strengths!
When looking at your strengths, think about them in relation to your competitors. For example, if all competitors provide high quality products, then a high quality product is not a strength, it's a necessity.
· What could you improve?
· What should you avoid?
· What are people in your market likely to see as weaknesses?
· What factors lose you sales?
Again, consider this from an internal and external perspective: Do other people seem to see weaknesses that you don't? Are your competitors doing any better than you?
It's best to be realistic now and face any unpleasant truths as soon as possible.
A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
· What good opportunities can you spot?
· What interesting trends are you aware of?
Useful opportunities can come from such things as:
· Changes in technology and markets on both a broad and narrow scale.
· Changes in government policy related to your field.
· Changes in social patterns, population profiles, lifestyle changes, and so on.
· Local or national events.
· What obstacles do you face?
· What are your competitors doing?
· Are quality standards or specifications for your job, products or services changing?
· Is changing technology threatening your position?
· Do you have bad debt or cash-flow problems?
· Could any of your weaknesses seriously threaten your business?
Once you have completed your SWOT Analysis, you should have a list of ideas you can use to strengthen, change and improve your business.