Wherever you are, in a startup with fewer than 10 people, or a huge corporate 500+ people, you have heard before about the importance of SWOT analysis and why all businesses should conduct it in business plans. It helps you to evaluate your company and set powerful plans for development.
What is SWOT analysis definition?
SWOT analysis is an abbreviation of Strengths, Weaknesses, Opportunities, and threads. Actually, SWOT analysis is used for small businesses, corporates, even individual projects. It drives real data and facts regarding what you are analyzing by answering a list of questions for each.
SWOT analysis reduces failure chances as it helps to understand what is missing, and tools you can use while setting a strategy and a plan.
What is the purpose of SWOT analysis?
The importance of SWOT analysis in marketing plan includes the following:
- SWOT analysis is very important in determining the current situation for the company including internal issues and external threats or opportunities.
- SWOT analysis helps in developing new projects, monitoring, and assessments.
- It helps you to avoid past mistakes and find appropriate solutions for your business.
- Provides realistic data and new ideas for development.
SWOT Breakdown
We all know what SWOT stands for, but what are the details for each one? And how to perform this analysis?
1. Strengths
Strengths describe what your company is good at, what you do very well? And what makes it unique? In this part, you should identify all your strengths, for example high sales revenue, having experienced consultants and a passionate operation team, or having a good market share.
Remember that providing high-quality services/products is a strength of course, but it is mandatory for every business to succeed.
2. Weakness
Once you find your strength points, it’s time now to be honest with yourself and identify weak ones. What are the obstacles standing in the way of the progress of your business? What are the things that your company needs right now? Maybe financial issues or non-skilled personnel and so on.
3. Opportunities
They are chances that you should take advantage of in order to return to you positively on your business. They can be advantages.
4. Threats
These are the risks that may negatively affect your business’s success or its growth. Such as financial risks.
What are the internal and external factors?
Although all the previous factors are the most common in SWOT analysis, sometimes companies divide them into two groups: internal and external.
- Internal includes strengths and weaknesses, they can be controlled by you or by your team and they can be managed and adjusted easily.
- External includes opportunities and threats, they mean matters you don’t have control over as competitors for example. An ideal method must be found to take advantage of opportunities and avoid risks.
SWOT Analysis Example
After knowing the importance of SWOT analysis The following are sample questions you can use while conducting this type of analysis:
Strengths
- What are the main advantages of the business?
- What is the selling proposition of the company?
- What are the strength points in the operations team?
- Do employees have enough training and mentorship?
- What about brand awareness for the company?
- What are the resources of the company?
Weaknesses
- What services/products are not performing well?
- What is the financial situation of the company?
- Do employees lack experience?
- Does the company have a high turnover?
- Are technologies that are used in the business updated or not?
Opportunities
- What new technologies and techniques should be used to develop the business?
- Are there new segments in the market you should target?
- Is there a chance to expand your business?
Threats
- What are the risks that can affect business growth?
- Do competitors plan an expansion or launching new products?
- Are there any issues with the business target?
You can set a large questionnaire regarding each group of these, and answer each in detail, then collect your data and use it in your strategy.
