The more you understand about your business, your market and your competitors, the better prepared you are for the business journey that lies ahead – and this is where a simple SWOT analysis can be an invaluable tool in your strategic plan. But what exactly is a SWOT analysis?
Building a detailed picture of your business
SWOT stands for Strengths, Weaknesses, Opportunities and Threats – and this kind of analysis helps you to get a more detailed understanding of your business and market.
By breaking things down into four key quadrants, you can review each area and begin to build up your business intelligence profile.
Let’s take a look at each of the quadrants:
- Strengths – in this section, you list the areas where the business is particularly strong and has a positive presence. In essence, these are the business attributes that would make a potential customer choose you over a competitor. Elements to review may include your service levels, brand profile, level of expertise, price point, product features, or location etc.
- Weaknesses – this section is where you list the weaker areas of the business. You need to be impartial and objective here and think about where improvements are needed and where your competitors may do things better. Things to consider include company size, the quality of your management team and workforce, the penetration of your marketing, value you’re adding for customers, or even the amount of funding you have available to grow and expand the business.
- Opportunities – these are the areas where the business has a chance to grasp an opportunity and enhance sales, growth, revenue or overall profits etc. Think about elements of your product/service delivery that could be done better, customers that are currently not being served by your competitor, or new advances in technology. Perhaps you can turn a weakness into an opportunity? For example, being the smaller ‘underdog’ in the market might be a positive marketing message!
- Threats – look at the things which could have an adverse impact on the business over time. This could be the growth of a key competitor, a failing labour market, a fall in the exchange rate that impacts on your exports or the cost of overseas supply, or even a lack of access to the funding required for you to grow and attain your business goals. By recognising these threats, you can proactively plan to avoid the negative impacts.
Finally, stand back and look at the bigger picture that your SWOT analysis is showing you. Are there relationships between the strengths/weaknesses and potential opportunities. Are there things you can do to reduce the threats?
By getting proactive, you enhance your strengths and boost those all-important opportunities!
Talk to us about getting the specific business advice you need.
If you want to have the best understanding of your business and market, a SWOT analysis is an excellent starting point. We can help you pinpoint the strengths, weaknesses, opportunities and threats – and drive the next stage in your evolution.