In the beginning, you should know that the SWOT is just an umbrella term. Actually, SWOT analysis stands for strengths, weaknesses, threats, and opportunities. After breaking the umbrella terms, I think you are somewhat clear about the things in which you are going to analyze your business with the help of SWOT analysis. You can use this analytic tool to commence a new business or to guide your existing business. The SWOT analysis helps you to analyze every aspect of your business so that you can know what should you do next to make the business successful.
Doing SWOT analysis
The easiest way of doing SWOT analysis is to draw a table with four squares. Inside each square, you can list the strength, weakness, opportunities and threats of the company as shown in the table below –
Steps that can guide you to perform SWOT Analysis of your business
You should follow really simple steps and search answer for a few questions which will enable you to perform SWOT analysis effectively. The following steps and general questions will help you to make your SWOT analysis better.
Step 1: Find the strength of your business
To find the strength of your business, you need to analyze your internal environment. Try to find out the positive aspects of the company which are serving as the strengths for the business. You can analyze the business processes if they are providing any strength for your business. You can analyze the strength of the assets that you have in your business team. The assets in the team may include skills and knowledge, network, reputation, network, and education.
Besides this, you can analyze the physical assets within your business. Physical assets include cash, machinery, and equipment. Try to identify the positive aspects of these assets. E.g., analyze if the technologies and equipment used in the business are latest. After that analyze the competitive advantage that you are getting. You can include anything that has been serving you to become better than your competitors. E.g., if you have skilled human resources than competitors or have better quality service than your competitors.
Step 2 – Find the weakness of your business
In this step, you will find the negative aspects of your business which detract from the strength of your business. Actually, you can analyze the strength and weakness at the same time. E.g. while analyzing the business processes, you can find if there is a need for any improvement in the business processes which will be your weaknesses.
Similarly, while analyzing the team, you can find gaps in your team which will be a weakness of your business. While analyzing the assets, you can find the need for assets or you can find some outdated technology in your business which will be your weakness. If you are not getting a competitive advantage, then you can include this in your weakness.
Step 3 – Find your opportunities
Doing business means you have lots of opportunities. But you need to find out the best opportunities which will enhance your business at low cost and effort. Find out if your products and services are going popular among the public and there is an opportunity of doing a lot within your business. Find out different events which will be beneficial for your company and business. You should analyze the political changes and legal changes so that you can plan ahead and grab the opportunity to grow your business.
Step 4 – Find out threats
Either you have got a large company with lots of capital or a small company with a few capitals, you always have threats. Try to analyze your market situation and find out competitors in your market. The competitors are a real threat to any business company. You need to analyze if any new business company are entering into your industry within your business area. You will have a threat of losing reputation if you do not follow the rules and regulations properly. So, analyze the national, local and international policies which could affect your business. Analyze consumer behaviour so that you can know if their behaviour is changing and your business is at threat.