How To Do A SWOT Analysis
How to do a SWOT analysis
SWOT is a strategic planning tool that compares internal factors (resources) like the organization's strengths and weaknesses, to external opportunities and threats.
Its main purpose is to help the business use its strengths, tap into opportunities, improve on its weaknesses and prepare for to face threats. In other words, it helps the business achieve its goals and objectives (Mission).
Now that we know a little more, let's get into learning more about how to do a SWOT analysis. When putting together the business internal strengths with its external opportunities, they produce leverage or multiply the benefits for the business.
The problem arises though, when environmental (external) threats attack the business's weaknesses. For instance, a company's inability to innovate because Of its bureaucracy.
This situation also causes constraints (threats) for businesses unable to tap into opportunities because of internal limitations. And a business becomes vulnerable when an external or environmental factor threatens the business's strengths.
External factors could be competitive, political, legal, economic, technological, and socio-cultural.
Now, let's analyze our current situation, what could we take advantage of, learn where we need to improve and evaluate our options and prepare to face challenges and what would keeps us from reaching our goals, so that we tackle them straight up.
Time to be critical about ourselves, not easy but very useful.
Strengths >>> Leverage <<< Opportunities
Strengths! Internal Factors
Cost and financial advantages, customer loyalty, modern production facilities, brand name, pricing.
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can't?
What do people in your market see as your strengths? What makes you unique?
Opportunities! External Factors
Enter new markets, gap on the market, add to product line, loosening regulations, innovation, fragmented market.
Do people have a need?
Do people prefer something else?
Are there changes in government policy?
Are there any changes in technology?
Vulnerability>>> <<< Constraints ----> Problems
Weaknesses --->Internal Factors
High operation costs, weak management outdated systems, bad customer service, weak market image, inefficient operations.
What could you improve?
What could you avoid?
Are there changes in Government policy?
Are there changes in Technology?
Lots of competition, mature market, economic crisis, unfavorable Government regulations, consumer changing tastes and preferences.
What challenges do you face?
What are competitors doing?
Is changing technology making things difficult?
Is there an issue with finances?