Why use SWOT Analysis in business?
A SWOT analysis helps you discover and explore the Strengths, Weaknesses, Opportunities and Threats of an organisation or business venture and will enable you to assess these four aspects.
Using a SWOT analysis will reduce your chance of failure, by understanding what you’re lacking, and eliminating hazards that would otherwise catch you unawares.
An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats):
Strengths and Weaknesses are two things that can make a business successful. These are internal factors that you, as a business owner, can change. Your company’s Strengths can be the things your organization does well or the qualities that differentiate you from your competitors. Your company’s Strengths can also include assets and resources, such as skilled team members or technology. Your business could have Weaknesses. These could be things your competitors do well or something your business does not have.
Opportunities and Threats are external factors beyond your control. But they can have a significant impact on your business, for better or for worse. External opportunities encompass everything you can do for your business to grow or increase sales. There are many Opportunities, such as new markets or products that meet emerging needs or trends. Threats are anything that could threaten your success or decrease your growth. Threats could be from new competitors, financial threats, or negative attitudes towards your business.
Using a SWOT Analysis in Business
Whether as a sole trader or a company, using a SWOT analysis will give you an insight into your current position, that of your competitors and future prospects in the marketplace.
Its aim is to discover how you can achieve a competitive advantage, and identifying existing and possible problems.
It can make plans to capitalize upon positives and fix any potential problems. With this in mind, decision makers should be better able to determine whether an initiative, project, or product is worth the effort and what needs to be done to make them successful. This analysis aims at helping businesses match their resources to the operational environment. There is no point producing a SWOT analysis if you are not going to use it! Your strategy should be devised around STRENGTHS and OPPORTUNITIES.
A SWOT analysis can prove to be extremely useful for business planning. It can lead to the discovery or elimination of an untapped market, or it may help to identify any potential obstacles to your business’s growth. Recognizing your Strengths and addressing your Weaknesses can help you shape new Opportunities as well as counter the effect of external Threats.
The key words are MATCH and CONVERT
A challenge for any business is to convert weaknesses into strengths. For example:
Example Completed SWOT Analysis
Other Strengths and Weaknesses:
Other Opportunities and Threats:
Expectations of stakeholders
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