What is a SWOT analysis?
What is SWOT analysis?
SWOT analysis is study undertaken by an individual or business to identify its internal strengths and weaknesses, as well as its external opportunities and threats or those of competitors. Whenever you do a SWOT analysis on your business, make it two dimensional and look from both a product and a brand point of view. Then and only then will you have a well rounded and actionable look at your entire business.
The SWOT method was originally developed for business and industry, but it is equally useful in the work of community health and development, education, and even for personal growth.
How do you complete a SWOT analysis?
SWOT Analysis Template
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Strengths. Include strengths that the business has. Strengths should be the competitive advantages that the business uniquely owns. Most business owners just focus on the attributes of the products or services they offer and quite honestly they don’t generally differentiate from competitors. This is why you should also include strengths in the brand as well.
If you are planning to start a business, you may have an employee or member of your management team who has prior experience in the industry you are planning to enter. You may already know where to go to find the assistance you need and this would be considered a strength for this analysis.
What is it about your brand equity that sets you apart in the industry? What does your brand stand for and how does your brand engage with your customers?
Weaknesses. Identify weaknesses that the business uniquely faces, and focus on the factors that the weaken competitive stance. Look at weaknesses from a brand perspective as well. Does the brand stand out in the marketplace and do customers understand what the brand is all about, above and beyond the products themselves?
If you are planning to start a business, you may not have previous experience in the industry you are considering. You may have a lack of qualified employees or your business will not support full time employees, these would also be considered weaknesses.
Opportunities. Opportunities are considered mostly external. What opportunities are available for the business?
If you are planning to start a business, think through the various ways you can expand your brand, because those opportunities will likely be even more impactful to your business. Take advantage of low interest loan packages from various sources for start-ups or possibly grants for feasibility studies.
Threats. Threats are from outside of the business and will directly impact with very little control. Most threats are universal to all businesses in a given category, which is why you should look at the potential threats to the brand along with product threats. You may only be one crisis away from permanently weakening your brand, so make sure you proactively identify the threats to both your products and to your brand.
If you are planning to start a business, you may have the threat of local regulations negatively impacting your business. Unforeseen competition (local or foreign), dissolution of markets, and adverse weather may also have a negative effect on your new business.
Why is completing a SWOT analysis important?
Focus is the key to making your two-dimensional SWOT analysis really actionable. The study isn’t about making lists, but about thinking about your product and your brand and identifying the two or three factors in each section that will drive your business forward. Focus on a short list of truly actionable items. By looking at your SWOT analysis on both a product and a brand perspective, you’ll be able to bring a renewed focus and action plan to your business. A great SWOT analysis can also help:
Explore possibilities for new efforts or solutions to problems.
Make decisions about the best path for your business. Identifying your opportunities for success in context of threats to success can clarify directions and choices.
Determine where change is possible. If you are at a turning point, an inventory of your strengths and weaknesses can reveal priorities as well as possibilities.
Adjust and refine plans mid-course. A new opportunity might open wider avenues, while a new threat could close a path that once existed.
SWOT also offers a simple way of communicating about your initiative or program and an excellent way to organize information you've gathered from studies or surveys.
Pro Tip
When conducting your SWOT analysis keep in mind that one item can offset another. For example, your strengths may combat your weaknesses and your opportunities can offset your threats.
