Growing your business means taking the time to think about where you might improve.
Most companies out there have a similar goal.
Figuring out how to improve then becomes key.
To do this, many organizations turn to conducting a SWOT analysis. From the largest corporations to small businesses, a SWOT analysis can be quite useful.
Now if your eyes started to glaze over at the term “SWOT analysis”, you don’t have to worry. This isn’t something that requires extreme technical expertise or teams of business advisors.
In fact, a SWOT analysis can be quick and simple.
Some might even describe it as fun — if you do it correctly, that is.
Luckily, that’s why we’re here. If you have questions about how to do a SWOT analysis or why you should do one in the first place, read on.
What is a SWOT Analysis?
A SWOT analysis is a way to analyze different aspects of your company and determine how competitive it is.
It can help you decide what strategies to use in the future so that you see continued success.
Let’s break down SWOT analysis a bit more.
SWOT stands for strengths, weaknesses, opportunities, and threats.
Let’s take a look at each category individually.
Look at what advantages you have over others.
The more specific you can be when talking about your strengths, the better your SWOT analysis will turn out.
As good as your company is, it’s not perfect.
By looking at your weaknesses, you can see where you fall short.
Identify the aspects of your business that may keep you from achieving your goals.
Figure out areas that need improvement.
As you’ll see, pointing out your weaknesses is a crucial part of getting the most out of a SWOT analysis.
The marketplace is changing all the time. This is where you identify any opportunities you might not have thought of before.
Think about what promising new customers might be out there.
Identify developing trends you could capitalize on.
Look at favorable changes in your marketplace that could provide you with a serious edge over your competitors.
Look at any factors in the marketplace that could end up hurting your business.
Think about potential risks that could arise as you grow.
Come up with situations that may prove challenging to your efforts to reach out to more customers.
Working with those four categories, you’ll be able to come up with a comprehensive SWOT analysis.
Another thing to note is that you’ll be looking at both internal and external factors.
Strengths and weaknesses deal mainly with internal parts of your company. They’re things that you have control over.
Opportunities and threats are all about external elements. These are things that are outside your control.
How to Do a SWOT Analysis
So now you know what a SWOT analysis entails.
Now how do you do one?
Believe it or not, it’s actually quite easy.
A SWOT analysis isn’t something reserved solely for major companies with lots of resources. It’s something pretty much any company can do.
As you might have guessed, this is all about brainstorming.
So if you work with a small group of people, get them together to get started.
If you work on your own, you can do it all yourself. It might be helpful, though, if you bring in some close friends or colleagues who know about your company.
Most SWOT analyses are done by drawing a grid made up of four squares.
In each square, you put one of the four categories discussed above.
The top two squares will have Strengths on the left and Weaknesses on the right. The bottom two squares will have Opportunities on the left and Threats on the right.
Then it’s time to start brainstorming!
Go over each category in turn and write down ideas in each quadrant as they come to mind.
Obviously, the more you know about your company and industry, the easier it will be to fill out.
To help you get started, here are some examples questions for each category.
- What makes your company unique?
- What does your company do well?
- Which areas are you most successful in?
- What resources do you have that gives you an advantage over others?
- What areas need the most improvement?
- What negative things about your business do you hear from customers?
- Why do potential customers fail to convert?
- What are some common problems you always seem to run into?
- Where do you feel limited?
- What could your business do better?
- Where could you find additional promising customers?
- Which outside trends will have a positive impact on you?
- Which upcoming events could prove helpful in growing your business?
- Will your market experience growth in the future?
- What competitors might you face in the near future?
- Which trends will have a negative impact on you?
- Is your market on a downward trajectory?
- Are there any recent developments which may create challenges for you?
Once you have all the ideas written down, it’s time to start narrowing your list.
Some ideas may be combined into one idea. Others may be crossed off entirely if they’re too vague or only partially related to the topic.
Think of this as a weeding out process so that you’re left with only the best ideas for each category.
From there, you can create a finalized SWOT analysis which prioritizes the areas you need to focus on for the future.
SWOT Analysis Examples
Okay, let’s move away from generalities and look at some examples.
We’ll start with a brand everyone knows: Coca-Cola. A few years back, the soft drink company did a SWOT analysis and published the results. You may find them interesting.
Coca-Cola has a number of notable strengths, such as brand recognition and a vast amount of resources. The company also identified a growing population as an excellent opportunity.
On the flip side, Coca-Cola noted that water management during its manufacturing process was a major weakness. It also said the growing trend of people choosing more nutritious drinks was a possible threat.
So perhaps one of your strengths could be a unique story you can pitch to your customers. This hook helps you stand out from your rivals.
Maybe a weakness is a lack of return customers after they’ve initially bought from you.
A threat might be the oversaturation of your market, with lots of competitors entering the space.
So you can see how helpful a SWOT analysis is to help you analyze the current state of your company and its potential for the future.
Reach those customers that you haven’t been able to before. Help your audience convert and stay converted.
It’s all within reach, but you’ll need to conduct a SWOT analysis to determine which specific areas to capitalize on.
Why Do a SWOT Analysis?
Doing a SWOT analysis is all about improving your business.
But the SWOT analysis isn’t the last step. You need to take the insights you’ve gained and turn them into actual strategies.
Once you have your list of items, develop a plan that will help you see the most success.
The strategies are often split into four groups.
Strength-opportunity strategies take your strengths and use them to maximize your identified opportunities.
Weakness-opportunity strategies plan out specific actions from opportunities that will help you minimize your weaknesses.
Strength-threat strategies detail using your strengths to handle external threats.
Finally, weakness-threat strategies try to minimize your weaknesses in order to avoid threats.
SWOT Analyses Benefit Your Business
A SWOT analysis helps you create a roadmap for your business.
It helps you identify where you want to go.
In other words, it leads to a plan for the future.
You may even use a SWOT analysis for specific occasions.
Do you have a new product you want to launch? Conduct a SWOT analysis to identify possible strengths and weaknesses.
Wondering if you should attend a convention or trade show? A SWOT analysis may help you decide if it’s worth it.
A SWOT analysis is quick and easy to do, and it can provide some wonderful benefits for your company.
Have you done a SWOT analysis before? What did you learn from it? Let us know in the comments below.