Why You Need SWOT Analysis for Your Business
SWOT is an acronym for a form of business analysis. It helps you figure out where your company stands in four key areas: strengths, weaknesses, opportunities, and threats. The former two are internal factors, while the latter two are external factors, as explained by Business News Daily. To learn how to assess each, just keep reading.
Strengths reflect what your business does well and what it can lean on. To perform a business analysis of your company’s strengths, it is helpful to ask yourself questions such as these:
- Why are customers drawn to your business over your competitors?
- What financial resources do you have?
- What physical resources do you have? (Examples here include equipment and real estate.)
Weaknesses are areas in which your business could need improvement. To identify them, try asking questions along these lines:
- Is your business understaffed or otherwise missing people with key skills?
- Is your business located in an ideal spot—that is, does its physical space suit its needs?
- Are any of your business’s processes inefficient and/or ineffective?
In the opportunities segment of the SWOT business analysis, the goal is to identify outside factors that may help your business. To identify opportunities, questions like these are helpful:
- Is demand increasing for what your business provides? In other words, is the market growing?
- Will taxation or regulatory changes benefit your business in the near future?
- How strong is your business’s reputation?
Finally, threats are external forces that may damage your business. To figure out threats to your business, here are some sample questions:
- Are new competitors on the way?
- Are upcoming disruptions like new technology potential sources of harm?
- Are your suppliers in good shape?
After considering those four quadrants, the next step is to develop a plan. For instance, see if your strengths can help fight off your threats and if your opportunities can shore up your weaknesses.
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