In this article, you will discover everything you need to know about the method of SWOT analysis. You may be wondering what SWOT stands for – Strengths, and Weaknesses, the Opportunities, and Threats, and is the preferred method of analysing various aspects of a business.
SWOT Analysis - FAQ
The SWOT analysis method is the most popular technique used to focus and analyse certain aspects of a business. Using this method will reveal potential weaknesses and even future failures a business may face, the aspects of the business that may be working well, as well as highlighting any hazards or areas where competitors may be able to overtake you. Using the SWOT analysis can enable you to grow, to develop and to better strategise your business, which in turn will streamline and catapult your business ahead of the competition.
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Writing a good SWOT analysis guide doesn’t have to be a daunting and difficult process. Sit down with members of the team or people you trust and discuss your business in depth. On a piece of paper, write down the words, Strengths, and Weaknesses, the Opportunities, and Threats and write a few relevant points under each word. Really think about your business – how do you deliver your product or services?
Do we know what our competition is doing? What do we do well and how can we improve? It may be beneficial to consider the Strengths and Weaknesses of your business as internal factors – things that you can improve within your team and organization such as the processes and quality. On the other hand, it may be beneficial to think of Opportunities and Threats as factors that are external, such as the economy, competition and customers.
The work of conducting a SWOT analysis is vital to the success of your business. It is a good way to see which processes work well for your business and highlights areas where further research or investment may be required. Spending valuable time conducting this analysis will allow you to make the necessary changes and in turn, will catapult the business ahead of your competition. It’s important to continue these analyses regularly as the business grows and progresses to ensure a smooth and streamlined delivery.
The benefits of using the SWOT analysis method are endless. For little to no cost, you can gain an understanding of the fundamentals of the main aspects of your business. You are able to foresee any hazards or weaknesses, enjoy more opportunities, get ahead of your competition, and you’ll also garner the respect of your team as you show your willingness to improve.
Whilst there are a number of benefits to using the SWOT analysis method, there are a small number of limitations. Whilst conducting the analysis will highlight any issues or hazards, the method isn’t able to offer solutions for improvement. Another limitation may be that if there are many improvements that need to be made, it may be difficult to prioritise the issues highlighted. When conducting this analysis, a lot of information and suggestions will be discussed and although not always useful, take time to really think about the steps needed to make the changes.
SWOT Analysis: Definition
When discussing the importance of SWOT analysis, it is defined as being a useful framework to analyse an organization’s Strengths, Weaknesses, the Opportunities, and Threats. The SWOT analysis will highlight areas that require particular concentration or investment in order to streamline, grow and present even more opportunities for the business.
How to do a SWOT analysis the right way
If you’re planning on conducting a SWOT analysis, you should follow this method. It’s vital that you have a structure so that you can analyse each aspect of your business successfully.
You should call upon your team and ask them to share openly and honestly where they feel improvements and perhaps investment should be made. Your team should know that you’re actively looking for this feedback to make the organization as successful as possible.
Draw a table, such as a SWOT Analysis Matrix where you write out the words – Strengths, Weaknesses, Opportunities and Threats with a box underneath where notes can be made.
Use brainstorming techniques which will allow you to learn and expand your own skillset. You could even ask customers and suppliers for their own feedback when it comes to working with the business to understand their own experiences and to know if there is anything that can be improved.
Questions that can help inspire a SWOT Analysis
Here are some questions that may make your SWOT analysis easier to discuss:
|What do you do well?||Most of what you do will be done well and it's important to highlight that there are things that you do that don't necessarily need improving now, but may be required in the future|
|What do others think your strengths are?||Here is where feedback is vital with external parties, such as suppliers and customers. These strengths are also important to understand as you may want to make more investment into what already works well but could be done quicker, for example|
|What could you improve?||In every organization, there's room for improvement. With your team, try to make a plan and prioritise the work that needs to be done so that everyone can work together|
|What opportunities are available to you?||As an organization, the sky really is the limit, but try to be realistic with the time, budget and resources you have. Reach out, speak to others and don't be afraid to set goals for your business|
|What are the threats?||In every organization, there are threats. No customers, no money, falling behind the competition - these are all threats that could be detrimental to your business. Avoid these by regularly adopting the SWOT analysis|
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In a Nutshell
Here is a short summary when considering SWOT analysis:
- A way to understand the fundamental factors of a business that concentrates on its Strengths, Weaknesses, the Opportunities, and Threats
- It can allow you to make the relevant changes and improvements which can provide more opportunities and is a way to get ahead of the competition
- It is an extremely cost effective way to streamline and improve your business
- SWOT analysis may provide too much information without revealing the solutions
- A simple table or a conversation can be a way to extend skillsets and gains trust