Use SWOT Analysis to access the strengths and weaknesses of your Business

The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key pieces of information into two main categories:

• Internal factors – The strengths and weaknesses internal to the organization.
• External factors – The opportunities and threats presented by the external environment to the organization.

The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all of the 4Ps; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix.

SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.

It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.One of the most common methods of assessing the strengths and weaknesses of your business is to conduct a SWOT analysis, where SWOT stands for strengths, weaknesses, opportunities and threats.Source

 

Strengths

Essentially, this defines your company’s competitive advantage. Some questions to answer include:

• What does your business do well?
• What resources do you have access to (human, financial, intellectual property)?
• What are you known for in the market?
• What is it about your business that your competitors cannot match?

Weaknesses

This looks at the areas where you and your business need to improve. Some questions to answer include:

• What doesn’t your company do well?
• What don’t customers like about your products or service?
• Where are the pressure points in your business?
• What do competitors do better than you? 

Opportunities

This sets out the areas where you could grow your business in the future. Some questions to answer include:

• What are the trends in your industry that could create opportunities (technology, demographic or social changes, regulation)?
• What new products do your customers need?
• What products would complement your current offering?
• What geographic areas could you target?

Threats

These are external and internal factors that could create problems for your business. Some questions to answer include:

• Do you lack the resources to grow your business?
• Are your competitors threatening your business in any way?
• Are industry trends such as changing technology or regulations a threat to your business?
• Are you vulnerable to an economic downturn or other economic changes?