Most of you have heard a thing or two about SWOT analysis and why it is important in taking your business into a whole new level. But what is SWOT Analysis? It is a compilation of your company’s strengths, weaknesses, opportunities, and threats. It’s primary objective is to help companies, different organizations develop a full awareness of the factors involved in making and running a business.
SWOT Analysis is considered to be a tool in developing a strategy towards success. It can help one’s organization into knowing the current situation or standing of your business in the future. Through this type of analysis you can find out what is working well for your company and what is not. It is a kind-of a technique assessing the four aspects of your business. It helps you identify the strength of your company, what are your probable weaknesses, what opportunities you can consider for the improvement of your strategy and the probable threats that can trigger and affect your business in general.
Through SWOT Analysis, you can make the most of what you’ve got to your organization’s best advantage. And through this as well you can reduce the chances of failure, simply by knowing your weaknesses, and eliminating hazards that would surface.
By following the acronym of SWOT and what it stands for, you can come up with a matrix that can easily help you identify the 4 factors mentioned earlier. It helps you plan your business goals and formulate the strategies in accomplishing those objectives.
STRENGTHS are the things that your organization does well. It is in fact the anchor that distinguishes you from your competitors. It is usually a summation of all your advantages, a compilation of all the answers why your company is the best. It answers the question of what makes your brand unique, what your expertise and skills are, and the things your company does well and even the tangible assets or upper-hand you have to your competitors.
Remember that you can only consider any aspect in your company if it gives you a clear advantage, otherwise it can fall into the other three aspects.
WEAKNESS now that you’ve identified your strengths it will be easier to know your weaknesses. Like strengths, weaknesses are inherent features of an organization, so you should focus on your people, resources, systems, and procedures. In this part of the analysis you can initially think of ways to improve, and the practices you should avoid or omit.
Weaknesses could also be the things your organization lacks in and not only the negative things to be changed.
Remember that a SWOT Analysis works better if you are honest about your company’s weakness. Knowing your weaknesses gives you a room for improvement or what we call opportunities.
OPPORTUNITIES these are the things we figured out upon identifying our weaknesses. This part of the SWOT analysis are the openings or chances for something positive to happen, something to make strength out of.
It usually arises from situations outside the organization, or external factors. It requires a keen eye to know and feel if there are opportunities and this could be an opening for advantages for short and long term. It allows you to develop strategies that can help you achieve your business goal. It will also lead you to the market and let you compete with an upper-hand.
Having a pulse for opportunity can make your company or brand better. Being able to spot or identify these opportunities can be a game-changer that will increase the organization's competitiveness.
THREATS these are anything that can negatively affect your business from the external factors such as: chain problem, marketing requirements, or a shortage in products and staff. That is why it is a part of the SWOT analysis in that way you can anticipate threats and take action against them before it deeply affects your organization.
Threats are obstacles you need to face when starting or running a business. These refer also to the challenges you need to overcome in getting the outcome of the product you are selling in the market.
You might also consider what your competitors are doing, most of which should be considered and a trigger whether you should be changing your organization’s strategy to meet the challenge. You must always be ready to explore the external challenges and be alert on what course of action to take when you are caught between threats, and have the eye to turn these threats into opportunities which later on become your strength.
Overall, SWOT analysis is a simple and useful framework in analyzing your organization’s strengths, weaknesses, opportunities, and threats. By doing so, it can help you build on what you do well, to address what you’re lacking to, minimize the risks, and turn things to probable advantage of chances for your success.
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