A SWOT analysis examines four aspects of performance that typically determine the success or failure of a company, employees or even an individual. Standing for strengths, weaknesses, opportunities and threats, this analysis can help new and emerging companies determine their proper place in today’s competitive marketplace. A SWOT analysis can also help established businesses chart their future as they consider issues common to all peer companies.
What makes your company special? What makes your employees excel? Your answers to these and scores of other questions will help identify your organization’s strengths. Look for your firm’s strengths by scrutinizing every aspect of your business and each one to peer companies. No area is off-limits. Examine management structure, training and company culture. Study pricing, new product development and market penetration. When you know your strengths, you can leverage them to improve your company’s overall competitive standing or your employees’ performance.
A weakness isn’t a flaw as much as it is a caution signal, alerting you to areas that need improvement. Identify them, and then avoid them or work to improve these facets of your company. Ask yourself where your company can improve? Does it have the financial and human resources to do so? Can it take advantage of other opportunities that arise? Can you hire outside resources to strengthen areas where your company is weak? One magnified weakness can bring a firm to its knees, making the time and cost of shoring up limitations comparatively small.
Opportunities surround you and your business. Your task is to find them and leverage your strengths to take advantage of them. For example, what can’t competitors copy? Your answer could be an opportunity. Do you have room to grow your business by selling new products and services to existing clients? Maybe your company can expand into new markets with existing products and services? Identifying strengths, weaknesses and threats can yield opportunities for your business. Leverage your firm’s strengths to exploit growing trends.
There are a variety of ways to collect data. The method you choose depends upon how geographically dispersed your target customers or clients are. Are you a business in a local community, or do you sell to or serve customers nationally? It also depends on your budget, and the resources you have to run the research – whether you’re doing it yourself or hiring a research agency.
It’s one thing to make a list of your company’s strengths, weaknesses, opportunities and threats. It’s another thing to take that information and develop a plan of action. Once you complete a comprehensive SWOT analysis, incorporate your findings into your business plan and marketing plan.