What is a SWOT Analysis and How Do I Make One?
The point of a SWOT Analysis is to help develop a strong business strategy. It is an acronym that breaks down the Strengths, Weaknesses, Opportunities, and Threats your business faces. The first two are internal, the latter two are external. Considering these elements is crucial to developing a strong strategy for your business.
In order to get the best results, a SWOT Analysis should be conducted by a group of people who each have different perspectives and are involved in your business. A mixture of management, sales, customer service, and customers will contribute insight that is valuable and unique.
Typically, the worksheet is broken up into four squares.
Strengths (Internal, Positive Factors)
Weaknesses (Internal, Negative Factors)
Obstacles (External, Positive Factors)
Threats (External, Negative Factors)
But it is okay to just create a list for each of the four categories.
Here are some questions you can ask to trigger brainstorming for each category:
- What do we do well?
- What internal resources do we have? (Positive attributes of people, tangible assets of the company)
- What advantages do we have over competitors?
- What internal, positive aspects add value or give us an advantage?
- Which factors that are within our control detract from our ability to obtain or maintain a competitive edge?
- Which areas can we improve to accomplish objectives?
- What does our business lack?
- Which opportunities exist in our market that we can benefit from?
- Is there a positive perception of our business?
- Has there been recent growth in our industry, or other changes that create an opportunity?
- Who are our competitors?
- What factors, beyond our control, could place our business at risk?
- Are there challenges beyond our control that may lead to deteriorating revenue?
- Has there been a significant change in supplier prices or the availability of materials?
- Has there been any shifts in the economy, government regulations, or consumer behavior that could negatively impact sales potential?
- Has a new product or technology been introduced which could make our solution obsolete?
Once you are finished brainstorming and have listed multiple Strengths, Weaknesses, Opportunities, and Threats then you may want to reorganize each list in order of priority and look for the solutions. Understand that creating a SWOT Analysis may not be about finding the solutions… it is more about gaining a clear insight and understanding the internal and external, positive and negative elements that your business faces.