Most people see the letters SWOT and break into a cold sweat. It’s one of those business productivity concepts that intimidate most people. Nevertheless, conducting a SWOT analysis for your business is a crucial first step in any marketing strategy. It’s not as difficult and as time-consuming as one might think, and it could also be a lot of fun. Most importantly, doing it helps you see the business in a whole new light.
What is SWOT Analysis?
SWOT analysis is used by companies to evaluate the business’ performance as well as the competitions’ objectively. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats and is an exhaustive list of the four parameters mentioned above. Strengths and weaknesses are internal parameters and are controllable and changeable. Opportunities and threats are external parameters and are not controllable and changeable.
The whole point of conducting a SWOT analysis is to help businesses develop a better, stronger, and more realistic business strategy by ensuring you take a tally of the strengths and weaknesses, as well as opportunities and threats the business faces. See how straightforward it is?
How to Conduct a SWOT Analysis for Your Business
- Assemble the team.
SWOT analyses are best conducted by a group of people who see the company from different angles. Therefore, ensure that every department is represented when conducting the analysis. This is to make sure that different insights are taken into account. A representative team is also a wonderful opportunity for team building, participation, and encouraging buy-in.
- Evaluate your strengths.
Strengths are the business’ positive points; things that the company is doing well and are giving it the advantage over the competition. Ask questions like:
- What does the business do well?
- What advantages does the business have over the competition?
- What internal resources do you have that add value to the company (i.e. positive people attributes and tangible assets)?
- Evaluate your weaknesses.
Weaknesses are the business’ areas for improvement. It’s important to be completely honest when evaluating weaknesses. Otherwise, you’ll end up with a distorted view and you won’t be able to address the gaps that need to be addressed. Ask questions like:
- What could businesses do better?
- Which areas need to be improved to achieve the business goals or compete with the competition?
- What does the business lack (i.e. employees’ attributes or tangible assets)?
- Evaluate opportunities.
Opportunities are everywhere. The key is recognizing them and then acting on the ones that you feel will add value to the business. Ask questions like:
- What are the current trends that you can take advantage of to sell more or expand?
- What changes are happening in the market to create an opportunity?
- Evaluate the threats.
Threats are things that can affect your business negatively. The key, again, is recognizing them, if possible before they occur, and proactively deal with them before they become larger and harder to deal with. Ask questions like:
- Who’s your competition (existing or potential ones)?
- What factors or situations could place the business at risk?
- Are there shifts in regulation or consumer behavior that could threaten the business?
- Develop a plan.
After evaluating your business’ strengths, weaknesses, opportunities, and threats are, it’s time to develop both short-term and long-term strategies. Create action plans to keep improving your strengths, address your weaknesses, take advantage of the opportunities, and mitigate the threats.
Today’s businesses might have changed but the concepts remain the same. To develop an effective digital marketing strategy or any business strategy, conducting a SWOT analysis for your business is an absolute must.