How To Do A SWOT Analysis Correctly
How To Do A SWOT Analysis Correctly
How often do you do a SWOT analysis? Business challenges such as gaining market share, maintaining competitiveness, and staying relevant to customers always exist.
A SWOT analysis can help identify strengths, weaknesses, opportunities, and threats to address these challenges.
When is a SWOT useful? Businesses apply the methodology before investing in new offerings or making significant changes to their business operations or business model, including implementing new policies or changing tact mid-course.
Performing a SWOT analysis is simple. Follow these steps to conduct a SWOT analysis correctly.
Strengths
Your company’s strengths are what make it stand out from the competition. Figuring these out is as simple as asking your team and leadership and referring to customer reviews.
Alternatively, you can ask customers for honest opinions about your products and services. This information will help you identify areas where your company doesn’t necessarily need improvement.
Your business strengths may include your customer service, 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. Consider this exercise a positive step toward minimizing weaknesses so your business can reach its full potential.
Weaknesses
Let’s be honest; no one likes thinking about their flaws or weaknesses. However, to turn a 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 be good at leading.
Maybe the quality of your products has diminished over time, and you’re starting to notice that customers are seeing 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 keep the company from its true potential?
Opportunities
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 determine what opportunities are available to the organization right now and whether the company should take advantage of them.
You might find that you’ve got an excellent opportunity to work with another organization to expand your operations or 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 seize the opportunity now, or do we need more resources, better policies, or a better team to take advantage of it?
Not every opportunity is good for the business as a whole, which is why it’s so important to know everything possible about each opportunity. If you can work with another company, research that company’s values, business practices, and products to see if you match.
Threats
A threat to your business is immediately impactful and needs to be addressed as quickly as possible. Modern companies can face many threats, from audits to safety issues to financial problems and everything in between.
You’ll need to thoroughly analyze your current threats and devise an effective strategy to reduce and eventually eliminate them.
Ask yourself the following questions during your brainstorming session:
- What threats does the company face that could impact 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.
Summing Up
Use the SWOT analysis regularly and liberally within your business. For example, your marketing and sales campaigns will perform better when you take positive action to use strengths and opportunities in your content to overcome your weaknesses and threats.
The SWOT analysis can be the go-to tool for business improvement and development. However, for deeper insights and accurate direction, your business must commit to transparency and disclosure to get to the core of how your business is performing.
Accepting change may be almost impossible if what you find out is unwelcome news. For example, discovering that the leadership team or CEO is a business’s greatest weakness may come as a surprise. Once you know this fact, it’s hard to ignore, so the best action is to turn it into an opportunity—change the leadership!
