Business ideas in 2022 are over the roof to account for the average population’s immediate revenue supply. Businesses must keep up with the demand and hail solutions for the market supply. Running a business in this era is hard, but it is essential to analyse its status every quarter to ensure it is not deadbeat or too hectic. This is when the business requires SWOT analysis, a powerful tool to strategise your business plans for many months and work for established and small businesses.
What is SWOT Analysis
SWOT stands for Strength, Weaknesses, Opportunities and Threats.
SWOT Analysis is an easy but powerful tool to evaluate the position of your business in the marketplace. It combines your company’s strengths, weaknesses, opportunities and threats. These are formulated through internal and external factors, strategising for the current and future. The Strength and weaknesses are internal factors and focus on the present, while the opportunities and threats are external factors and focus on the future.
What is Your Unique Selling Point?
What is your Advantage in the Business?
What do other companies see as your Strength?
What are the options in the market for your business?
How can your Strength present opportunities?
What Trends can open doors for you?
What resources do you lack?
What area do the competitors excel in?
What improvement is needed?
Is your weakness an advantage over competitors?
What are the factors that can close your business?
What is your competitor’s strategy?
Why Must One Do a SWOT Analysis?
An analysis of the company’s characteristics keeps the company evolving and ready to serve for a longer term. If you’re starting as a new business, the SWOT analysis helps choose a business strategy and be a step ahead of your competitors. This analysis will allow you to seek opportunities way before you start and save you the crisis management. All businesses must ensure this plan annually to anticipate issues, work on grey areas, prepare for threats and keep in touch with their customer’s needs and industry trends.
How to Do A SWOT Analysis?
This is a more straightforward process when a diverse group of people in an organisation are involved, thereby providing a broad insight into all the business divisions.
- Create A SWOT Analysis Template
Anyone can create the SWOT analysis template as it is an easy matrix of 2*2 tables, a box for each area of Strengths, Weaknesses, Opportunities and Threats.
2. Team Analysis
It is essential to gather meaningful insight about the business, rather than wait for the hierarchical order to decide the SWOT for the company. At times, involving your employees and even your customers could give you a unique strategy to address their concerns. Once all the members gather, you can brainstorm for small companies or with established ones; you can submit analyses from each department and then compile them with the founders. These meetings can address the following.
- Strength is the characteristic of your company which is doing exceptionally well.
- These could include all the advantages your company has over the competitors, certain materials only you have access to and your unique selling points.
- For example – Your loyal customer base is an advantage to your company and a threat to the competitors, so discuss the strategies to maintain brand loyalty.
- State the factors that would bring a massive advantage to your brand and not the industry, as high-quality products are necessary to all the businesses and not a benefit to your business alone.
- Weakness is a characteristic that decides your organisation’s grey area lacking in purpose.
- These could include all the crisis departments needing improvement for competition, less capital, short supply chain, etc.
- The company needs to accept all suggestions and be honest about their options for improvement in this section.
Strength and weakness are internal factors that can be controlled within the organisation and depend on the ever-changing customer base, company culture, brand image, locations, staff etc.
- These are the external factors that could profit your business without your control.
- Changes in government regulations, social patterns, market requirements can be an opportunity for your company.
- For example – Small businesses have had profits from GST as it gives them an option to lower their taxes.
- These are the external factors that pose a potential danger to the company.
- These include competitors, or rise in the market value, or a shortage of supplies.
- Financial debts could be an essential factor as companies thrive on them.
- Weather is an external factor that cannot be controlled, so if you’re running a crops business, droughts ought to destroy it.
Opportunities and Threats depend on external factors such as competitors, supply chain, economy, trends, weather etc.
How to Use the SWOT Analysis
Once you gather the above information, it’s time to build organisational and personal strategies. The internal and external factors can match against each other to create the design through converting strengths into opportunities and eliminating threats through weaknesses.
- Corporate Planning
The internal factors can be resolved by setting objectives for the company and internal appraisal to scan the office environment of any patterns for weaknesses. Renew the goals for the company and fill up the gaps of the faults mentioned through the group analysis. If necessary, rebuild your brand and strategise according to the new vision set forth for the company.
- Competitor Analysis
A company’s reputation uplifts the brand image in the market so that a competitor analysis can bring forth the advantages and disadvantages of your business. The marketing team can analyse the external factors by going through the competitor’s data such as their production cost, source of profits, product differentiation, industry positioning etc. This is less of a spying activity and a defensive strategy to lessen the threats.
SWOT Analysis Example
Let’s analyse the Strengths, Weaknesses, Opportunities and Threats of Amazon. Amazon is a multinational company dealing with E-commerce, cloud computing, Digital streaming and Artificial Intelligence.
- Strong Brand Image
- Customer Oriented
- Unlimited Merchandise options
- Multi-Vendor platform
- Sub Products of Brand – Amazon Web service, Amazon Marketplace and Amazon Prime.
- Easy to imitate the business model
- Workplace condition complaints
- Data breach allegations
- Decline in consumer protection
- Limited brick and mortar models
- Expansion in developing markets
- Physical Stores in more cities
- Introduce Electric Rickshaws
- More acquisitions
- Government regulations in different countries
- The Exploitation of child labour
- Aggressive competition from Target, Walmart etc.
The Key Analysis
SWOT Analysis helps a business grow in many sectors and build as many strategies as required. This could be the one opportunity for all the employees in a company to give their collective opinion for the company’s betterment and provide new insights. Therefore, conducting an annual analysis helps you get ahead of the competition and maintain a secure position in the industry.