A SWOT analysis is one of the best ways to gain insight into your business operations, discover opportunities and set your company up for future success. “SWOT – which stands for "strengths, weaknesses, opportunities and threats" – is a type of analysis that helps you develop your business strategy by comparing internal factors (strengths and weaknesses) against external factors (opportunities and threats). Examples of internal factors include things that you have control over and can change, like your staff or your intellectual property. External factors are things that you cannot control, like consumer trends or competitors.”
Strengths
“Consider your strengths relative to your competitors and from your customers' perspective. For example, all your competitors may sell using the telephone, whereas you use direct face-to-face selling. Anything a customer wants that you provide and your competitor doesn't, can be a possible strength.” Knowing your strengths will allow you to capitalize on them by giving you differentiators to focus on in your marketing campaigns.
Weaknesses
“Once you’ve figured out your strengths, it’s time to turn that critical self-awareness on your weaknesses. What’s holding your business or project back? This element can include organizational challenges like a shortage of skilled people and financial or budgetary limitations. This element of a SWOT analysis may also include weaknesses in relation to other companies in your industry, such as the lack of a clearly defined USP in a crowded market.” Your weaknesses don’t need to remain so, and that is one of the primary purposes of running a SWOT analysis. Knowing where you need improvement is an essential step in growing your business.
Opportunities
“Growth in business requires seeking out new opportunities, including new potential customer groups, broader product distribution, developing new categories of products and services and geographic expansion. In a SWOT analysis, the management team identifies emerging opportunities to take advantage of right now and tries to forecast longer term opportunities so advance planning can be made to be ready to enter the market when the time is right.” Being ready for opportunities when they present themselves can make or break your business. A SWOT analysis helps you to identify these opportunities, it’s up to you to find a way to take advantage.
Threats
“Threats to your business may be disguised as weaknesses; however, threats are external and may be short-term circumstances that are resolved relatively quickly. Weaknesses, on the other hand, are internal factors well within your control. Threats may include the determination that the level of success of your competitor is due to price, declining demand for your most popular product, customer-friendly policies used by competitors and a downturn in the economy.” There are any number of threats to your place in the market. Identifying these threats and establishing strategies to neutralize them is necessary to remain competitive.
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