How often do you do a SWOT analysis? In business, there are always challenges to contend with, including gaining market share, being competitive and evolving to stay relevant with customers.
SWOT is the acronym for Strengths, Weaknesses, Opportunities, and Threats. Use the methodology before investing in new offerings or making significant changes to your business operations or business model, including implementing new policies or changing tact mid-course.
Performing a SWOT analysis is simple and effective, so here’s how to do one correctly for the best results.
Your company’s strengths are what make you stand out from the competition. Figuring these out is as simple as asking your team, your leadership, and even referring to customer reviews. Alternatively, you can request a customer to give their honest opinion about your products and services directly. This information lets you know where your company doesn’t necessarily need improvement.
Your business strengths may include your customer service or attention to detail, or something unique like you. 🙂
To know your business strengths collaborate with your staff, customers and advocates by asking open questions like:
- What do our customers say about our customer service and products/services?
- What good reviews seem to be reoccurring?
- Where do we perform better than our competitors?
- What constant praise comes from the leadership team? Are there consistent patterns?
Identifying your strengths can help your business market more effectively to acquire more sales.
The next task is identifying weaknesses in your business. See this exercise as a positive step in minimizing weaknesses so your business can reach its full potential.
Let’s be honest here; no one likes thinking about their flaws or weaknesses. However, to turn the weakness into a strength, you need to know what occurs to work out how to improve it. This could be arguably the most essential part of the SWOT analysis because your company’s weaknesses could be holding you back from more tremendous success or your future goals.
Weaknesses come in all shapes and sizes; from the most minor mistakes to the most prominent shortcomings that affect everyone within an organization. Maybe your leadership team is incredibly unorganized or doesn’t contain enough qualified people to indeed be good at leading.
Maybe your products’ quality has diminished over time, and you’re starting to notice that customers are taking note of the drop in quality.
Some questions to ask your team during this part of the SWOT analysis are:
- What complaints do we frequently receive from customers?
- Where does the competition outshine our organization?
- How effective is our leadership team?
- Are we reaching our target audience effectively?
- What processes, ideas, or policies are holding the company back from its true potential?
If you’ve been in business long enough, you’ve probably encountered countless opportunities to expand your operations, increase your revenue stream, and increase your brand awareness. Your SWOT analysis will help you find what opportunities are available to the organization right now, and whether or not the company should act on them.
You might find that you’ve got a great opportunity to work with another organization to expand your operations, or an opportunity to appeal to a new audience. Ask yourself and your team some pertinent questions before moving forward:
- What opportunities are beneficial to the company at this exact moment?
- How will these opportunities help the company move forward?
- What costs are associated with the opportunity?
- Can the company take the opportunity at this moment, or do we need more resources/better policies/a better team to take advantage of it?
Not every opportunity that presents itself is good for the business as a whole, which is why it’s so important to know everything possible about each opportunity. If you have an opportunity to work with another company, do your research on that company’s values, business practices, and products to see if you match.
A threat to your business is immediately impactful and needs to be addressed as quickly as possible. Modern businesses can face many threats, from audits to safety issues to financial problems and everything in between. You’ll need to do a thorough analysis of your current threats, and come up with an effective strategy to reduce and eventually eliminate them altogether.
Ask yourself the following questions during your brainstorming session:
- What threats does the company face that could have an impact in the next 1-6 months?
- What are the long-term threats to the business?
- How fast can we act to reduce or eliminate the threat(s)?
- What will happen if the threats aren’t addressed?
- Do we have the resources or manpower to address these threats?
- How impactful are the threats? (Financial loss? Company closure? Government action? Lawsuits?)
Don’t underestimate this section of the SWOT, as it will help you identify the immediate danger to the company. Once you know what that is, you can craft a more well-rounded strategy to simultaneously address your weaknesses and threats.