The SWOT Analysis

From time to time you may have heard the term ‘SWOT Analysis’…and wondered not only what is was…but how it can benefit your business or organization. This article is a brief description of what a SWOT Analysis is…and what it entails.

Quite simply, a SWOT Analysis is perhaps the most effective, and objective way for you to determine how capable your company/organization is, when it comes to surviving ‘threats’ and capitalizing on ‘opportunities’. It is essentially a review of the Strengths, Weaknesses, Opportunities and Threats as they relate to your business or organization.

Typically, a SWOT Analysis would be undertaken prior to the establishment of a business (during the business plan phase), or at any other time when a substantial/major expenditure may be required e.g. when deciding whether or not to expand the premises, or in the case of increasing your product range/line. Through a SWOT Analysis you will gain an increased understanding not only of your business/organization, but an indication of any critical and remedial action necessary on your part.

THE FOUR ELEMENTS OF THE ANALYSIS NEED CAREFUL CONSIDERATION…

1. Strengths…what is it that your business/organization does well? Why do your customers buy from you? What differentiates your business/organization in the market? What are the things that are going well for you?
2. Weaknesses…what are the areas of your business/organization that cause you concern? What areas or issues do you need to work on? What are the areas/things in your business that are not right or going well? What areas need improvement?
3. Opportunities…What opportunities are available, which can be taken advantage of…both now and in the future? Are there new markets that could be tapped with your existing products and services? What opportunities exist to improve the way you perform your current activities, and what efficiencies could be gained? What are the new products and services that can be developed and added? What could you do, that you’re not doing now?
4. Threats…have there been any significant changes in the industry in which you operate? What are the issues your business/organization facing that threaten business? Are there any, or do you anticipate new competitors in your market?

A thorough and careful analysis of these elements will help you to determine what steps you need to take to: build on the strengths of your business/organization; to protect, and correct where necessary areas of weakness; to highlight and take advantages of opportunities; and assist you in devising contingency plans to counter possible threats.

And while it’s possible that a single individual can undertake a SWOT Analysis, it would be prudent to gain the input of key members within your business/organization. Seek to gain the ‘opinions’ of these people, with regard to the four elements within the Analysis…for a more ‘balanced’ assessment. Make sure that you set aside sufficient time…perhaps away from the business/organization…so you and your team can carry out a considered analysis away from the daily distractions.

On a final note, have the 4 P’s of the Marketing Mix…Product, Price, Place (distribution), and Promotion…in the back of your mind when assessing each of the elements within the SWOT Analysis.

INTERNAL

EXTERNAL

Sources:

1.      http://iws.ohiolink.edu/~sg-csu/SWOT.html

2.      http://www.maxpages.com/parexcellence/Article_5