How to Use a SWOT Analysis In Your Business

Any business, no matter the size, product offering, or market, will need at regular points to stop and analyse how they are performing both externally in the market they operate, as well as internally. Exploring where a company’s strengths lie, along with what opportunities and threats may be present, enables businesses to plan and prepare in advance and make informed decisions.  

What is a SWOT Analysis?

A SWOT analysis is a management tool that helps companies and organisations identify their strengths, weaknesses, opportunities and threats. It's used to help companies find ways to expand their business, improve efficiency and make effective long-term decisions.

Strengths

Strengths are the things that make your company stand out against the competition and give your business a competitive advantage. Ask yourself:

• What do you do well?
• What is unique about your business?
• What do our customers value about us?

If you run a restaurant, maybe your location is an advantage. If you're a web development company, maybe you have a highly talented team of developers.

It helps to be specific here, don’t use single words such as customer service or elaborate.

Overall, you might have an excellent customer service process, but there could be elements that are weak and need improvement. This is where this process can be valuable because the conversations and input from team members can produce enlightening and informative information.

Weaknesses

It's also essential that we identify the weak areas of our business. Discussing weaknesses can be viewed as a negative, but understanding and being honest about what you need to do better are easy wins. Perhaps you have poor customer service, a slow website or outdated processes. All of these are within your control and fixable. Ask yourself:

• What elements of the product or service need improvident?
• What are our competitors doing better?
• What areas of the business, internal and external, could be improved?

Once you've identified your company's weaknesses, brainstorm ways to turn them into strengths, and again, be specific. For example, if people complain about how slow your website loads, you can improve its performance by hiring in the necessary company to make the changes.

Opportunities

This section (and threats) predominately look at the external market forces of your business that do not fall within your control, including technological advancements, regulatory changes (GDPR for example), consumer trends, seasonal marketing opportunities, mergers/partnering and lifestyle changes. But it's not just about able to spot these opportunities, you also need to be able to identify what your business needs to do in order to embrace them.

Ultimately, being able to spot these opportunities and act upon them ensures that you are staying one step ahead of the competition.

Threats

The threats section of a SWOT analysis is about what external factors could negatively affect your business, and then create a contingency plan to mitigate the impact as much as you can. While it’s essential to look at the potential downsides of your business, keep in mind that opportunities can also become threats—has the competition taken action over an opportunity that you didn't?

For example: If you have an idea for a new product but don’t have the skills or resources to create it yourself and you don't employ the necessary staff, but your competition does, then what was an opportunity is now a threat.

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When conducting a SWOT analysis, it's helpful to use a grid (see example below) and add your points to the appropriate section. Make sure people know in advance what the area of focus is.

A SWOT analysis is a helpful tool for evaluating your business and planning for the future by developing strategies that will help you to overcome these obstacles to achieve your goals. It's also a useful tool to use to assess a new product line or a potential new market.

Ultimately we want to turn our weaknesses into strengths, be able to take advantage of opportunities and lessen or eliminate the impact of threats.

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