Tips For a Successful SWOT Analysis Essay
Before conducting a SWOT (strengths, weaknesses, opportunities and threats) analysis, decide what you want to achieve with it and consider whether it is the best tool for your needs.Tips For a Successful SWOT Analysis Essay
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If you decide a SWOT analysis is the best tool, the following tips will help you get the most out of it.
Keep your SWOT short and simple, but remember to include important details. For example, if you think your staff are a strength, include specific details, such as individual staff and their specific skills and experience, as well as why they are a strength and how they can help you meet your business goals.
When you finish your SWOT analysis, prioritise the results by listing them in order of the most significant factors that affect your business to the least.Tips For a Successful SWOT Analysis Essay
Get multiple perspectives on your business for your SWOT analysis. Ask for input from your employees, suppliers, customers and partners.
Apply your SWOT analysis to a specific issue, such as a goal you would like to achieve or a problem you need to solve, rather than to your entire business. You can then conduct separate SWOT analyses on individual issues and combine them.
Look at where your business is now and think about where it might be in the future, as well as where you would like to be.
Consider your competitors and be realistic about how your business compares to them.Tips For a Successful SWOT Analysis Essay
Think about the factors that are essential to the success of your business, and the things you can offer customers that your competitors can’t. This is your competitive advantage. It’s useful to keep these in mind when conducting a SWOT analysis.
Use goals and objectives from your overall business plan in your SWOT analysis.
Find out what business tools and resources are available to help you.
Create or revise your business vision to focus on your long term goals.Tips For a Successful SWOT Analysis Essay
Fill out a competitor profile chart to assist you in formulating you SWOT analysis questions.
A SWOT analysis is a strategic management decision-making chart, which looks at a company’s strengths, weaknesses, opportunities and threats from external and internal points of view, to identify opportunities and make recommendations for next steps. It’s a good starting point for a new business, as well as a good way to reassess the direction of your small business. Because the business environment frequently changes, it makes sense to revisit the SWOT analysis for immediate recommendations and opportunities.Tips For a Successful SWOT Analysis Essay
How to Use a SWOT Analysis
The purpose of creating a SWOT analysis is not to simply make a list, but rather to use an analytical technique to support strategic management decisions. Take the time to thoughtfully reflect on your core business and the current market environment. Research market trends and on your competitors to provide benchmarks to better understand the market and your relative competitiveness. After carefully developing a complete listing of the business’s external and internal strengths, weaknesses, opportunities, and threats, it will be time to match your strengths with opportunities and convert your weaknesses into strengths.Tips For a Successful SWOT Analysis Essay
Opportunities are external factors that influence the business. Internal opportunities would be classified as strengths. Where possible, threats should be converted to opportunities. These opportunities represent the potential growth of your business when you’ve implemented your marketing strategies. When evaluating identified opportunities, understand if they represent ongoing opportunities, or ones with a window of opportunity where timing is critical. If you’ve done your homework, you may uncover some lucrative sources of new business and grow your business.Tips For a Successful SWOT Analysis Essay
When identifying recommendations to make, consider how you can leverage your unique strengths in the current environment. Have there been any recent legal or competitive changes that may present a new opportunity to expand your market or improve your competitive edge? How can you convert your weaknesses into strengths? For example, if you’re overly dependent on a single product, then consider diversifying your products and expanding into new markets. Consider your research on the current market conditions and align your strategy to make the most of your strengths within your available resources and timing of opportunities.Tips For a Successful SWOT Analysis Essay
A SWOT analysis provides strategic insight on recommendations and opportunities for small businesses to map out a strategic plan. As an actionable management tool, the SWOT helps a small-business owner hone in on the right course of action to leverage the business’s unique characteristics. By turning threats into strengths, and matching strengths with opportunities, you can make the most of your power in the current marketplace and maximize your chances of success.Tips For a Successful SWOT Analysis Essay
Used in a business context, it helps you to carve a sustainable niche in your market. Used in a personal context , it helps you to develop your career in a way that takes best advantage of your talents, abilities and opportunities.
This article, video and infographic look at how to use the tool in a business context.
Click here to view a transcript of this video.
(Click here to learn how to do a Personal SWOT Analysis .)
Business SWOT Analysis
What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well-placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares.Tips For a Successful SWOT Analysis Essay
More than this, by looking at yourself and your competitors using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your market.
How to Do a SWOT Analysis
You can use it in two ways – as a simple icebreaker helping people get together to “kick off” strategy formulation, or in a more sophisticated way as a serious strategy tool.
Many people attribute SWOT Analysis to Alber S. Humphrey, however, there has been some debate on the originator of the tool, as discussed in the International Journal of Business Research.
Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate to external factors. For this reason, SWOT is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix.Tips For a Successful SWOT Analysis Essay
To help you to carry out your analysis, download and print off our free worksheet, and write down answers to the following questions.
What advantages does your organization have?
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can’t?
What do people in your market see as your strengths?
What factors mean that you “get the sale”?
What is your organization’s Unique Selling Proposition (USP)?
Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market.Tips For a Successful SWOT Analysis Essay
Also, if you’re having any difficulty identifying strengths, try writing down a list of your organization’s characteristics. Some of these will hopefully be strengths!
When looking at your strengths, think about them in relation to your competitors. For example, if all of your competitors provide high quality products, then a high quality production process is not a strength in your organization’s market, it’s a necessity.Tips For a Successful SWOT Analysis Essay
What could you improve?
What should you avoid?
What are people in your market likely to see as weaknesses?
What factors lose you sales?
Again, consider this from an internal and external perspective: do other people seem to perceive weaknesses that you don’t see? Are your competitors doing any better than you?
It’s best to be realistic now, and face any unpleasant truths as soon as possible.
What good opportunities can you spot?
What interesting trends are you aware of?
Useful opportunities can come from such things as:
Changes in technology and markets on both a broad and narrow scale.
Changes in government policy related to your field.
Changes in social patterns, population profiles, lifestyle changes, and so on.Tips For a Successful SWOT Analysis Essay
A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
What obstacles do you face?
What are your competitors doing?
Are quality standards or specifications for your job, products or services changing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?
Could any of your weaknesses seriously threaten your business?
When looking at opportunities and threats, PEST Analysis can help to ensure that you don’t overlook external factors, such as new government regulations, or technological changes in your industry.Tips For a Successful SWOT Analysis Essay
Using SWOT Analysis in Project Management and Marketing
If you’re using SWOT as a serious tool (rather than as a casual “warm up” for strategy formulation), make sure you’re rigorous in the way you apply it:
Only accept precise, verifiable statements (“Cost advantage of $10/ton in sourcing raw material x”, rather than “Good value for money”).
Ruthlessly prune long lists of factors, and prioritize them, so that you spend your time thinking about the most significant factors.
Make sure that options generated are carried through to later stages in the strategy formation process.Tips For a Successful SWOT Analysis Essay
Apply it at the right level – for example, you might need to apply the tool at a product or product-line level, rather than at the much vaguer whole company level.
Use it in conjunction with other strategy tools (for example, USP Analysis and Core Competence Analysis ) so that you get a comprehensive picture of the situation you’re dealing with.
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You could also consider using the TOWS Matrix . This is quite similar to SWOT in that it also focuses on the same four elements of Strengths, Weaknesses, Opportunities, and Threats. But TOWS can be a helpful alternative because it emphasizes the external environment, while SWOT focuses on the internal environment.Tips For a Successful SWOT Analysis Essay
A small start-up consultancy might draw up the following SWOT Analysis:
We are able to respond very quickly as we have no red tape, and no need for higher management approval.
We are able to give really good customer care, as the current small amount of work means we have plenty of time to devote to customers.Tips For a Successful SWOT Analysis Essay
Our lead consultant has a strong reputation in the market.
We can change direction quickly if we find that our marketing is not working.
We have low overheads, so we can offer good value to customers.
Our company has little market presence or reputation.
We have a small staff, with a shallow skills base in many areas.
We are vulnerable to vital staff being sick or leaving.
Our cash flow will be unreliable in the early stages.
Our business sector is expanding, with many future opportunities for success.
Local government wants to encourage local businesses.
Our competitors may be slow to adopt new technologies.
Developments in technology may change this market beyond our ability to adapt.
A small change in the focus of a large competitor might wipe out any market position we achieve.
As a result of their analysis, the consultancy may decide to specialize in rapid response, good value services to local businesses and local government.Tips For a Successful SWOT Analysis Essay
Marketing would be in selected local publications to get the greatest possible market presence for a set advertising budget, and the consultancy should keep up-to-date with changes in technology where possible.
SWOT Analysis Infographic
Click on the image below to see SWOT Analysis represented in an infographic:
Find Opportunities, Eliminate Threats
SWOT Analysis is a simple but useful framework for analyzing your organization’s strengths and weaknesses, and the opportunities and threats that you face. It helps you focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you.Tips For a Successful SWOT Analysis Essay
It can be used to “kick off” strategy formulation, or in a more sophisticated way as a serious strategy tool. You can also use it to get an understanding of your competitors, which can give you the insights you need to craft a coherent and successful competitive position.Tips For a Successful SWOT Analysis Essay
When carrying out your analysis, be realistic and rigorous. Apply it at the right level, and supplement it with other option-generation tools where appropriate.
A SWOT analysis is an incredibly simple, yet powerful tool to help you develop your business strategy, whether you’re building a startup or guiding an existing company.Tips For a Successful SWOT Analysis Essay
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Strengths and weaknesses are internal to your company—things that you have some control over and can change. Examples include who is on your team, your patents and intellectual property, and your location.Tips For a Successful SWOT Analysis Essay
Opportunities and threats are external—things that are going on outside your company, in the larger market. You can take advantage of opportunities and protect against threats, but you can’t change them. Examples include competitors, prices of raw materials, and customer shopping trends.Tips For a Successful SWOT Analysis Essay
A SWOT analysis organizes your top strengths, weaknesses, opportunities, and threats into an organized list and is usually presented in a simple two-by-two grid. Go ahead and download our free template if you just want to dive right in and get started.
SWOT template image
Here’s what the layout of a SWOT analysis looks like.
When you take the time to do a SWOT analysis, you’ll be armed with a solid strategy for prioritizing the work that you need to do to grow your business.Tips For a Successful SWOT Analysis Essay
You may think that you already know everything that you need to do to succeed, but a SWOT analysis will force you to look at your business in new ways and from new directions. You’ll look at your strengths and weaknesses, and how you can leverage those to take advantage of the opportunities and threats that exist in your market.
Who should do a SWOT analysis?
For a SWOT analysis to be effective, company founders and leaders need to be deeply involved. This isn’t a task that can be delegated to others.Tips For a Successful SWOT Analysis Essay
But, company leadership shouldn’t do the work on their own, either. For best results, you’ll want to gather a group of people who have different perspectives on the company. Select people who can represent different aspects of your company, from sales and customer service to marketing and product development. Everyone should have a seat at the table.Tips For a Successful SWOT Analysis Essay
Innovative companies even look outside their own internal ranks when they perform a SWOT analysis and get input from customers to add their unique voice to the mix.
If you’re starting or running a business on your own, you can still do a SWOT analysis. Recruit additional points of view from friends who know a little about your business, your accountant, or even vendors and suppliers. The key is to have different points of view.Tips For a Successful SWOT Analysis Essay
Existing businesses can use a SWOT analysis to assess their current situation and determine a strategy to move forward. But, remember that things are constantly changing and you’ll want to reassess your strategy, starting with a new SWOT analysis every six to 12 months.
For startups, a SWOT analysis is part of the business planning process. It’ll help codify a strategy so that you start off on the right foot and know the direction that you plan on going.Tips For a Successful SWOT Analysis Essay
How to do a SWOT analysis the right way
As I mentioned above, you want to gather a team of people together to work on a SWOT analysis. You don’t need an all-day retreat to get it done, though. One or two hours should be more than plenty.
Gather people from different parts of your company and make sure that you have representatives from every part. You’ll find that different groups within your company will have entirely different perspectives that will be critical to making your SWOT analysis successful.Tips For a Successful SWOT Analysis Essay
Doing a SWOT analysis is similar to brainstorming meetings, and there are right and wrong ways to run them. I suggest giving everyone a pad of sticky-notes and have everyone quietly generate ideas on their own to start things off. This prevents groupthink and ensures that all voices are heard.Tips For a Successful SWOT Analysis Essay
After five to 10 minutes of private brainstorming, put all the sticky-notes up on the wall and group similar ideas together. Allow anyone to add additional notes at this point if someone else’s idea sparks a new thought.
Once all of the ideas are organized, it’s time to rank the ideas. I like using a voting system where everyone gets five or ten “votes” that they can distribute in any way they like. Sticky dots in different colors are useful for this portion of the exercise.Tips For a Successful SWOT Analysis Essay
Based on the voting exercise, you should have a prioritized list of ideas. Of course, the list is now up for discussion and debate, and someone in the room should be able to make the final call on the priority. This is usually the CEO, but it could be delegated to someone else in charge of business strategy.Tips For a Successful SWOT Analysis Essay
You’ll want to follow this process of generating ideas for each of the four quadrants of your SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats.
Questions that can help inspire your analysis
Here are a few questions that you can ask your team when you’re building your SWOT analysis. These questions can help explain each section and spark creative thinking.Tips For a Successful SWOT Analysis Essay
Strengths are internal, positive attributes of your company. These are things that are within your control.
What business processes are successful?
What assets do you have in your team, such as knowledge, education, network, skills, and reputation?
What physical assets do you have, such as customers, equipment, technology, cash, and patents?
What competitive advantages do you have over your competition?
Weaknesses are negative factors that detract from your strengths. These are things that you might need to improve on to be competitive.Tips For a Successful SWOT Analysis Essay
Are there things that your business needs to be competitive?
What business processes need improvement?
Are there tangible assets that your company needs, such as money or equipment?
Are there gaps on your team?
Is your location ideal for your success?
Opportunities are external factors in your business environment that are likely to contribute to your success.Tips For a Successful SWOT Analysis Essay
Is your market growing and are there trends that will encourage people to buy more of what you are selling?
Are there upcoming events that your company may be able to take advantage of to grow the business?
Are there upcoming changes to regulations that might impact your company positively?
If your business is up and running, do customers think highly of you?
Threats are external factors that you have no control over. You may want to consider putting in place contingency plans for dealing them if they occur.
Do you have potential competitors who may enter your market?
Will suppliers always be able to supply the raw materials you need at the prices you need?
Could future developments in technology change how you do business?
Is consumer behavior changing in a way that could negatively impact your business?
Are there market trends that could become a threat?
Example of a SWOT analysis
To help you get a better sense of what at SWOT example actually looks like, we’re going to look at UPer Crust Pies, a specialty meat and fruit pie cafe in Michigan’s Upper Peninsula. They sell hot, ready-to-go pies and frozen take-home options, as well as an assortment of fresh salads and beverages.Tips For a Successful SWOT Analysis Essay
The company is planning to open its first location in downtown Yubetchatown and is very focused on developing a business model that will make it easy to expand quickly and that opens up the possibility of franchising. Here’s what their SWOT analysis might look like:
SWOT analysis for UPer Crust Pies
UPer Crust Pies SWOT analysis example
What to do next
With your SWOT analysis complete, you’re ready to convert it into real strategy. After all, the exercise is about producing a strategy that you can work on during the next few months.Tips For a Successful SWOT Analysis Essay
The first step is to look at your strengths and figure out how you can use those strengths to take advantage of your opportunities. Then, look at how your strengths can combat the threats that are in the market. Use this analysis to produce a list of actions that you can take.Tips For a Successful SWOT Analysis Essay
With your action list in hand, look at your company calendar and start placing goals (or milestones) on it. What do you want to accomplish in each calendar quarter (or month) moving forward?
You’ll also want to do this by analyzing how external opportunities might help you combat your own, internal weaknesses. Can you also minimize those weaknesses so you can avoid the threats that you identified?Tips For a Successful SWOT Analysis Essay
Again, you’ll have an action list that you’ll want to prioritize and schedule.
Back to the Uper Crust Pies example: Based on their SWOT analysis, here are a few potential strategies for growth to help you think through how to translate your SWOT into actionable goals.
Uper Crust Pies: Potential strategies for growth
Investigate investors. UPer Crust Pies might investigate its options for obtaining capital.Tips For a Successful SWOT Analysis Essay
Create a marketing plan. Because UPer Crust Pies wants to execute a specific marketing strategy—targeting working families by emphasizing that their dinner option is both healthy and convenient—the company should develop a marketing plan.
Plan a grand opening. A key piece of that marketing plan will be the store’s grand opening, and the promotional strategies necessary to get UPer Crust Pies’ target market in the door.
With your goals and actions in hand, you’ll be a long way toward completing a strategic plan for your business. I like to use the Lean Planning methodology for strategic plans as well as regular business planning (learn more about it here). The actions that you generate from your SWOT analysis will fit right into milestones portion of your Lean Plan and will give you a concrete foundation that you can grow your business from. You can download our free Lean Plan template to help you get started.Tips For a Successful SWOT Analysis Essay
If you have additional ideas for how a SWOT analysis can help your business and how it fits into your regular business planning, I’d love to hear from you.
When you perform a SWOT analysis you assess the strengths, weaknesses, opportunities and threats to a business, both internally and externally. The opportunities that you identify in your analysis should be exploited for your business’s advantage.Tips For a Successful SWOT Analysis Essay
Strengths and weaknesses are internal aspects of the business that you can change and control, such as product quality, employee ability and specialized knowledge. The difference between a strength and a weakness is whether it gives your business an advantage or places you at a disadvantage. Opportunities and threats are external market conditions, like changes is consumer demand, the economy or demographics.Tips For a Successful SWOT Analysis Essay
Opportunities are an external situation that your business can take advantage of. For example, an increase in average household spending could present an opportunity to sell more consumer goods; an increase in the number of births could present an opportunity for products and services aimed at young children like toys, care products and preschool programs. Identify potential opportunities by looking at market data from your own research or from publicly available sources.Tips For a Successful SWOT Analysis Essay
Linking Strength and Opportunities
An opportunity alone is not enough for a business to succeed. To take advantage of an opportunity, you need to have a corresponding strength. After assessing both your strengths and opportunities, look for ways you can pair them together. For example, if your company’s strength is excellent product development skills, you might pair those skills with an opportunity to develop a product for an emerging customer base.Tips For a Successful SWOT Analysis Essay
The recommendations of a SWOT analysis should stem primarily from the connections identified between strengths and opportunities. For instance, if your company offers exemplary customer service, you can develop a marketing campaign to target customers seeking better customer service. Where strengths are lacking, you can also recommend developing certain strengths to take advantage of opportunities.Tips For a Successful SWOT Analysis Essay
A SWOT analysis is a high-level strategic planning model that helps organizations identify where they’re doing well and where they can improve, both from an internal and external perspective. It is an acronym for “Strengths, Weaknesses, Opportunities, and Threats.”
You typically want to conduct a SWOT analysis at the beginning of your strategic planning process or during a strategy refresh. Your entire leadership team should be heavily involved, because they should have the ability to look across your organization and offer insight into your competitive environment and/or business landscape. When the leadership team offers appropriate recommendations regarding your strengths, weaknesses, opportunities, and threats, you will end up with a SWOT analysis that has the credibility to be used constructively in the strategic planning process.Tips For a Successful SWOT Analysis Essay
A Detailed SWOT Analysis Example
To help you get started, we’ve created this SWOT analysis template. (The examples below are specific to a financial organization, but only for examples sake; the SWOT analysis exercise is applicable to all businesses!) You’ll notice we divided our hypothetical examples for strengths, weaknesses, opportunities, and threats based on the four Balanced Scorecard perspectives. You don’t have to use the Balanced Scorecard to be successful with your SWOT analysis, but this method does provide a strong framework for your discussion.Tips For a Successful SWOT Analysis Essay
Start by asking the question, “What are we good at?” This is a broad question, but in the beginning stages of your discussion, you should accept all answers.
Financial Strengths: What is your most reliable source of financial growth? Is it your current customers? A particular product? Your service fee structure?
Customer Strengths: Where is your customer growth coming from? Is this coming from referrals, or a particular industry segment like healthcare or retail? Is it mainly retail or commercial? Why are your customers choosing you over your competitors?
Internal Strengths: What do you do very well as an organization? Are you the first to innovate products in your industry? Do you have strong customer relationships or partnerships?Tips For a Successful SWOT Analysis Essay
Learning & Growth Strengths: Where do you excel insofar as your employees are concerned? Is it your compensation model? Could it be your workforce development program? Your culture?
Take your strategy from a grand plan to the real deal with these free strategic planning templates.Tips For a Successful SWOT Analysis Essay
Next you should ask yourself, “What are we not good at?” or “Where do we have opportunities to improve?”
Financial Weaknesses: What is your biggest financial weakness? Perhaps most of your customers are in a cyclical industry and subject to market whims, for example. Or maybe your most used product has the lowest profit margins.
Customer Weaknesses: Where do your customers think you need to improve? This could be your investment products, locations, loan origination, or competitive prices for interest rates.
Internal Weaknesses: What do you do poorly? Do you have opportunities to improve in project management for opening new branches? What about for one-touch call resolution for customer service?
Learning & Growth Weaknesses: What are your biggest challenges with employees? Do you have particularly high turnover in certain departments or a negative perception of the organizational culture?
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Following your discussion on threats, ask those in leadership to look toward the future and consider, “Where do we see big possibilities for our organization?”Tips For a Successful SWOT Analysis Essay
Financial Opportunities: What is your biggest opportunity to improve your finances? This might be starting a new product line, increasing customer retention, or going after a new geographical area.Tips For a Successful SWOT Analysis Essay
Customer Opportunities: Where could you dramatically improve with your customers? Could you improve your online interface? What about cross-selling related products, or better understanding your customers’ purchasing habits?
Internal Opportunities: What processes will drive you well into the future if you could improve upon them? This may entail partnering with a mortgage origination company or developing neighborhood sponsorships.
Learning & Growth Opportunities: What opportunities do you have to leverage staff? For example, do you have cross-training opportunities? Could you make a few tweaks to improve your culture and thus your retention?
After identifying opportunities, zero in on your biggest threats by asking, “What do we see on the horizon as being potentially harmful to our organization?”Tips For a Successful SWOT Analysis Essay
Financial Threats: What threats could seriously impact your financial health? This could be low-cost competitors, a partner entering the banking space, or an overseas banking product.
Customer Threats: What is your biggest concern about your customers? Does one of your competitors offer zero-fee checking that could steal some of your market share? How simple is your customers’ ease of departure?Tips For a Successful SWOT Analysis Essay
Internal Threats: What current areas of your business might harm you later? Do you have a new product rollout soon that could potentially fail? Are you struggling through a merger or an office upgrade?
Learning & Growth Threats: What threatens the people within your organization? This could be anything from instability in your customer support department to staff member departures to a department-specific pushback against new technology.
After you have completed your SWOT analysis brainstorming session, take the following steps:Tips For a Successful SWOT Analysis Essay
1. Consolidate your analysis results into a four-box SWOT matrix.
Four-box SWOT matrix
As we mentioned in the introduction (and in our SWOT analysis example), your SWOT helps you identify strengths and weaknesses that are either helpful or harmful to your organization. As you can see from the SWOT matrix example above, strengths and weaknesses are internal to the organization, while opportunities and threats are of external origin. Strengths and opportunities are helpful to your organization’s strategy, and weaknesses and threats are harmful to your organization’s strategy.Tips For a Successful SWOT Analysis Essay
Once you’ve completed the SWOT brainstorming process with your leadership, consolidate your results so you can see all the positive opportunities—and any negative trends—that could affect your strategy, and how you operate on the whole.Tips For a Successful SWOT Analysis Essay
2. Start developing your strategy map.
Before you can begin developing your strategy map, you need to be certain you fully understand strategy mapping. (Take a look at this strategy execution toolkit for more information.) If you have asked the 16 questions posed in the SWOT analysis example above (specific to each of the Balanced Scorecard perspectives), then it should be relatively straightforward to filter by each perspective and come up with key objectives for that area. For example, does it seem as though you urgently need to make strategic adjustments to one particular area of your strategy? Do you need to address a failing new product launch before addressing market expansion opportunities?
3. Communicate to the organization where, how, and why you will be changing your strategy.
At this point, we recommend running a “brown paper exercise” with your SWOT analysis that involves everyone in your organization. Print your SWOT matrix in large size, and ask employees to add post-it notes in any or all of the four boxes of the SWOT matrix if they feel there is something the leadership team missed. (You can also ask employees to add their names next to their suggestions so leadership can follow up with them.) Not only is this exercise great for inter-office discussion, but it also gives leaders the chance to consider opinions from staff “in the field.”Tips For a Successful SWOT Analysis Essay
4. As you start implementing a strategy, build programs to help overcome weaknesses or go after opportunities.
Keep in mind that your SWOT analysis isn’t an end product—it’s the first step to helping you align your strategy around the areas you’ve identified as strengths, weaknesses, opportunities, and threats. Specifically, you’ll want to put some measures in place to track progress on correcting your weaknesses and seizing your opportunities.Tips For a Successful SWOT Analysis Essay
Weaknesses: For example, if one of your weaknesses is too few branch locations, you could start an initiative to either implement more ATMs or open up branch locations inside grocery stores.
Opportunities: If you’ve identified an opportunity for a new product line, you may decide to work with one of your closest customers to fully define and understand their needs in order to strengthen the product—or you may decide to sell an early version of the product to customers in a particular test market before you invest heavily in an unproven area.Tips For a Successful SWOT Analysis Essay
Running a business is hard work. With so many different things pulling at your attention, it’s easy to get caught up in the minutia at the expense of the big picture.
The only way to make sure your business sticks around for the long haul is to periodically step back and look at things from a broader perspective.
That’s where SWOT analysis comes in. A SWOT analysis will push you to look at your ecommerce business’s potential, whether you’re just starting a business or working taking it to the next level. You won’t just examine how your company is performing today, you’ll investigate how it’s going to perform next week, next month, and even next year.Tips For a Successful SWOT Analysis Essay
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What is a SWOT analysis?
A SWOT analysis lists the good and bad things about your business, both from an internal and external viewpoint, by identifying strengths, weaknesses, opportunities and threats.Tips For a Successful SWOT Analysis Essay
SWOT analysis sounds like some kind of scary accounting process—it’s not. Doing a SWOT analysis doesn’t involve addition or subtraction, but it is very helpful. SWOT stands for:
S – Strengths
W – Weaknesses
O – Opportunities
T – Threats
It’s basically the ultimate to-do list. A SWOT analysis forces you to think about the future. You know how your business is doing today, but do you know where it will be tomorrow? This process will help you figure it out and—more importantly—plan for it.
SWOT Factors Positive Negative
Internal Strengths Weaknesses
External Opportunities Threats
Strengths and weaknesses are internal factors, while opportunities and threats are external factors. Internal factors come from within your ecommerce business while external factors come from the larger environment surrounding your business.Tips For a Successful SWOT Analysis Essay
Strengths and weaknesses mostly focus on the present, while opportunities and threats mostly focus on the future. What is happening versus what could happen.
Strengths and weaknesses are under your control. It may be difficult, but you can change them over time. Examples include:Tips For a Successful SWOT Analysis Essay
Conversely, opportunities and threats are typically outside of your control. You can try and plan for them or influence a positive change, but at the end of the day, it’s not up to you. Examples include:Tips For a Successful SWOT Analysis Essay
What Is SWOT Analysis?
Bonus: Click here to download your free SWOT Analysis Template. Use this free PDF to future-proof your business by identifying your strengths, weaknesses, opportunities, and threats.Tips For a Successful SWOT Analysis Essay
Who should do a SWOT analysis?
In short, everyone—whether you’re launching a new product or run an established business—should do a SWOT analysis.
If you’re just starting out or are still in the planning phase, a SWOT analysis will give you a competitive advantage. Doing it will inform your break-even analysis and give a more realistic picture of what you’re signing up for. Both should be included in a business plan, if you need to seek financing.Tips For a Successful SWOT Analysis Essay
Existing businesses should perform a SWOT analysis annually. Think of it as your annual State of the Business. Having it will allow you to keep your business running smoothly, anticipate problems, work on necessary changes or improvements, and make smarter decisions throughout the year. Basically—an annual SWOT analysis will keep you from losing touch with your business, customers, and industry.Tips For a Successful SWOT Analysis Essay
How to conduct a SWOT analysis
A SWOT analysis is far from scientific. There’s no objective way of measuring how well you do one. It relies on your ability to observe and recall internal and external factors that can impact your business. It’s not about making accurate predictions so much as it is about knowing what to plan for.Tips For a Successful SWOT Analysis Essay
Step 1: Gather the right people
While important business decisions typically need to be made by founders and senior-level employees, there’s no such thing as “too many cooks in the kitchen” with a SWOT analysis. Having more input, even from people who don’t fully understand your business, will only make it stronger.Tips For a Successful SWOT Analysis Essay
You may also find that you’ll get better buy-in on the strategy decisions that come out of the analysis if you include your employees in the process. Heck, even your customers can provide valuable insight.
Step 2: Host a brainstorming session
Once you’ve assembled your team, host a brainstorming session with everyone involved. You can either list strengths, weaknesses, opportunities, and threats together (better for small teams) or ask participants to create and submit lists individually (better for bigger teams).Tips For a Successful SWOT Analysis Essay
Include everything that comes up in each category. Don’t worry about how important each observation is at this stage—the idea is to not miss anything. Just write it all down.Tips For a Successful SWOT Analysis Essay
Step 3: Fill the gaps
Once you’ve exhausted everyone’s ideas and come up with four big lists, it’s time to start filling in gaps where additional explanation is needed. This is an opportunity for you and your team to ask questions that will determine how important each item on the list is.Tips For a Successful SWOT Analysis Essay
Ask everyone in the group to choose their top three items for each category. Most likely, a pattern will emerge that will show you what to focus on.
Even if it’s only you working on the analysis—don’t worry! In this case, you are likely involved in all parts of the business and will have good insight into what you need to consider. Crack a bottle of wine or brew a pot of tea, and dig in!
What Is SWOT Analysis?
Bonus: Click here to download your free SWOT Analysis Template. Use this free PDF to future-proof your business by identifying your strengths, weaknesses, opportunities, and threats.Tips For a Successful SWOT Analysis Essay
31 SWOT analysis questions to guide you
Whether you’re working alone or with a diverse group, getting the brainstorming started can be tough. The following questions are here to help get things moving. I recommend reading through them no matter what to avoid missing important factors.Tips For a Successful SWOT Analysis Essay
These are positive, internal factors that affect how your business performs. Although they may be difficult to change, they should be within your control:
What are we good at?
What do we do better than anyone else?
What is our competitive advantage?
What do we do that no one else does?
What resources do we have at our disposal?
What are our ecommerce company’s advantages?
What advantages do our employees have?
What valuable assets does our company have?
What do our customers like about our business?
These are negative, internal factors that affect how your business performs. Although they may be difficult to change, they should be within your control:Tips For a Successful SWOT Analysis Essay
What are we bad at?
What do our competitors do better than us?
What do our customers complain about?
What disadvantages does our team carry?
What is holding us back?
Which resources are we lacking?
What could we improve?
These are external factors that could affect your business in a positive way. They may be largely out of your control, but you can choose to leverage them:Tips For a Successful SWOT Analysis Essay
What potential regulation changes could help our business?
Is the market changing in a favorable way?
Is the current economy going to affect us in a positive way?
What opportunities have we not pursued yet?
What new opportunities are becoming available?
Is our cost of goods going down?
Is there a way for us to acquire useful resources that we do not already have?Tips For a Successful SWOT Analysis Essay
These are external factors that could affect your business in a negative way. They may be largely out of your control, but you can create a contingency plan to minimize the damage:
Who are our existing competitors?
What new entrants to the market could threaten our ecommerce business?
Is our market size declining?
Is the industry changing in a way that could negatively impact our business?
Is our cost of goods increasing?
Is a supply we rely on becoming scarce?
Are regulations changing in a way that could hurt our business?
Is our manufacturer unreliable?
How to use your SWOT analysis effectively
As business owners, we’re constantly having to prioritize what gets our attention. Tough decisions about resource allocation are unavoidable. No matter how successful you become, you’ll always have to pick and choose where to direct your attention. A SWOT analysis helps you determine which areas to focus your energy and resources.
Step 4: Narrow your lists
Start with the lists from your brainstorming session. Now work on narrowing down those lists so they will fit on a single page, arranged in a 2 x 2 SWOT matrix (example below). You’ll likely narrow your list based on two considerations: how powerful a factor is and how likely a factor is to happen.Tips For a Successful SWOT Analysis Essay
For example, relying on one big client for the bulk of your revenue is a powerful weakness: it leaves you in a vulnerable position—even if you’re pretty sure they’re not going anywhere. Conversely, even if you’re not worried about your rent increasing, you need to plan for an increase if lease negotiations are imminent.Tips For a Successful SWOT Analysis Essay
Even after you’ve created your single-page matrix, keep the unabridged lists around for future reference. You’re not going to focus on the rest of the list right now, but being aware of it will ensure you don’t miss any important issues, especially as situations change. What is less important now may become critical in the future, and you need to be aware of that possibility. You can always rearrange your list or come back to an item later.Tips For a Successful SWOT Analysis Essay
Step 5: Create strategies
For each of the items on your final list, create a strategy to exploit the advantages and opportunities, and to deal with the weaknesses and threats. These initial strategies don’t need to be particularly complex or robust, although you may choose to expand on them later. For now, just create a broad plan of action.Tips For a Successful SWOT Analysis Essay
Also, keep in mind that different factors can work together to balance each other out. How can you use your strengths to improve your weaknesses? How can you exploit opportunities to neutralize your threats? Can you leverage your strengths to better take advantage of opportunities? Is there a weakness you need to prioritize in order to prevent a threat?
What Is SWOT Analysis?
Bonus: Click here to download your free SWOT Analysis Template. Use this free PDF to future-proof your business by identifying your strengths, weaknesses, opportunities, and threats.Tips For a Successful SWOT Analysis Essay
SWOT analysis template
Here’s a sample SWOT analysis template, based on an online tailored shirt business. Although many more factors came up during brainstorming, these were deemed to be the most important.Tips For a Successful SWOT Analysis Essay
Locally made shirts mean faster turnaround on orders
Many repeat customers who promote the business
Good search engine rankings drive free traffic
Pricing on locally made shirts is not competitive
Higher costs mean fewer fabric options due to inventory costs
Customers don’t like taking their own measurements
Using technology to simplify the measurement process could increase conversions
New paid advertising channels such as Instagram and Pinterest could be effective
Custom made clothing is currently trending
Several competitors are currently undercutting prices
Website is difficult to use on a mobile device even though mobile traffic is increasing
A strong dollar could drive down international sales
Think about what strategies this business owner could implement to take advantage of this information. Remember, there’s no right or wrong answer here.Tips For a Successful SWOT Analysis Essay
6 SWOT analysis example strategies
The most important part of a SWOT analysis is how you use the information that comes out of it. Here are six sample scenarios (with potential decisions) to help you start thinking strategically.
Scenario 1: Your lease is nearing the end of its term and you need to renegotiate. Since the neighborhood has gone up in value, you’re worried you’ll be priced out.Tips For a Successful SWOT Analysis Essay
Strategy: Start selling online to mitigate some of the risk.
Scenario 2: You rely on a raw material that is in high demand and prices are rapidly rising as it becomes more scarce.
Strategy: Commit to a five-year contract to guarantee your supply and lock in at a lower price.Tips For a Successful SWOT Analysis Essay
Scenario 3: You have a surplus of cash flow and money to tap today.
Strategy: Set aside a fixed amount for emergencies and invest the rest in growth.
Scenario 4: You have a negative workplace culture and your employees are underperforming.
Strategy: Hire a culture consultant to help you turn things around.
Scenario 5: Most of your website traffic comes from search engines. If the algorithm changes and your website stops ranking, you could lose a lot of new business. You need to diversify your traffic.
Strategy: Start cultivating other traffic sources, such as social media or paid advertising.Tips For a Successful SWOT Analysis Essay
Scenario 6: Your entire business lives on your laptop and if it was stolen, you’d lose everything.
Strategy: Set up a program to automatically back up your files every night.
Working through a SWOT analysis on a regular basis will keep you from losing touch with your business, your team, and your customers. More importantly, it will help you stay successful in a turbulent marketplace.
Once you’ve had time to digest and think hard about the most important items on your list, flesh out your action plan and get to work!
If you’ve ever worked in a corporate office environment, you may have come across the term “SWOT analysis.” This has nothing to do with evaluating militarized law enforcement response units, and everything to do with taking a long, hard look at your company.Tips For a Successful SWOT Analysis Essay
Conducting a SWOT analysis is a powerful way to evaluate your company or project, whether you’re two people or 500 people. In this article, you’ll learn what a SWOT analysis is, see some SWOT analysis examples, and learn tips and strategies for conducting a comprehensive SWOT analysis of your own. You’ll also see how you can use the data a SWOT exercise yields to improve your internal processes and workflows.Tips For a Successful SWOT Analysis Essay
Before we get to the tips and techniques, let’s start with the basics.
What Is a SWOT Analysis?
A SWOT analysis is an analytical technique used to determine and define several key characteristics: Strengths, Weaknesses, Opportunities, and Threats – SWOT.
SWOT analyses can be applied to an entire company or organization, or individual projects within a single department. Most commonly, SWOT analyses are used at the organizational level to determine how closely a business is aligned with its growth trajectories and success benchmarks, but they can also be used to ascertain how well a particular project – such as an online advertising campaign – is performing according to initial projections.Tips For a Successful SWOT Analysis Essay
Breaking Down the SWOT Analysis Process
We know that SWOT stands for Strengths, Weaknesses, Opportunities, and Threats – but what does each of these elements mean? Let’s take a look at each element individually.Tips For a Successful SWOT Analysis Essay
The first element of a SWOT analysis is Strengths.
SWOT analysis strengths examples
As you’ve probably guessed, this element addresses things that your company or project does especially well. This could be something intangible, such as your company’s brand attributes, or something more easily defined such as the unique selling proposition of a particular product line. It could also be your people, your literal human resources: strong leadership, or a great engineering team.Tips For a Successful SWOT Analysis Essay
Once you’ve figured out your strengths, it’s time to turn that critical self-awareness on your weaknesses. What’s holding your business or project back? This element can include organizational challenges like a shortage of skilled people and financial or budgetary limitations.Tips For a Successful SWOT Analysis Essay
SWOT analysis weaknesses examples
This element of a SWOT analysis may also include weaknesses in relation to other companies in your industry, such as the lack of a clearly defined USP in a crowded market.Tips For a Successful SWOT Analysis Essay
Next up is Opportunities. Can’t keep up with the volume of leads being generated by your marketing team? That’s an opportunity. Is your company developing an innovative new idea that will open up new markets or demographics? That’s another opportunity.
SWOT analysis opportunities examples
In short, this element of a SWOT analysis covers everything you could do to improve sales, grow as a company, or advance your organization’s mission.Tips For a Successful SWOT Analysis Essay
The final element of a SWOT analysis is Threats – everything that poses a risk to either your company itself or its likelihood of success or growth.
SWOT analysis threats examples
This could include things like emerging competitors, changes in regulatory law, financial risks, and virtually everything else that could potentially jeopardize the future of your company or project.
Internal and External Factors
The four elements above are common to all SWOT analyses. However, many companies further compartmentalize these elements into two distinct subgroups: Internal and External.Tips For a Successful SWOT Analysis Essay
Typically, Strengths and Weaknesses are considered internal factors, in that they are the result of organizational decisions under the control of your company or team. A high churn rate, for example, would be categorized as a weakness, but improving a high churn rate is still within your control, making it an internal factor. Similarly, emerging competitors would be categorized as a threat in a SWOT analysis, but since there’s very little you can do about this, this makes it an external factor. This is why you may have seen SWOT analyses referred to as Internal-External Analyses or IE matrices.Tips For a Successful SWOT Analysis Essay
SWOT analysis internal external examples
Image via Bplans
Subcategorizing your four primary elements into Internal and External factors isn’t necessarily critical to the success of your SWOT analysis, but it can be helpful in determining your next move or evaluating the degree of control you have over a given problem or opportunity.
Now that we know what each of the elements of a SWOT analysis means, let’s take a look at how to go about creating and conducting a SWOT analysis.Tips For a Successful SWOT Analysis Essay
How to Conduct a SWOT Analysis
Like feature-benefit matrices, there are several ways to conduct a SWOT analysis. However, regardless of how you choose to structure your analysis, we need to start by asking a series of questions.
Let’s take our first element, Strengths, for example. To determine what your strengths are as an organization, you could begin by asking some of the following questions:Tips For a Successful SWOT Analysis Essay
What do your customers love about your company or product(s)?
What does your company do better than other companies in your industry?
What are your most positive brand attributes?
What’s your unique selling proposition?
What resources do you have at your disposal that your competitors do not?
By answering these questions, you’ll be in great shape to start identifying and listing your organization’s strengths.
SWOT analysis WordStream brand attributes examples
Positive brand attributes associated with WordStream, as
identified by our customers
We can use the same principle to determine your company’s weaknesses:
What do your customers dislike about your company or product(s)?
What problems or complaints are often mentioned in your negative reviews?
Why do your customers cancel or churn?
What could your company do better?
What are your most negative brand attributes?
What are the biggest obstacles/challenges in your current sales funnel?
What resources do your competitors have that you do not?
You may find that determining the strengths and weaknesses of your organization or project is considerably easier or takes less time than figuring out the opportunities and threats facing your company. This is because, as we said earlier, these are internal factors. External factors, on the other hand, may require more effort and rely upon more data, as these are often beyond your immediate sphere of influence.Tips For a Successful SWOT Analysis Essay
SWOT analysis internal external factor relationship diagram
Identifying opportunities and threats may require you to conduct in-depth competitive intelligence research about what your competitors are up to, or the examination of wider economic or business trends that could have an impact on your company. That’s not to say that opportunities and threats cannot be internal, however; you may discover opportunities and threats based solely on the strengths and weaknesses of your company. Some possible questions you could ask to identify potential opportunities might include:Tips For a Successful SWOT Analysis Essay
How can we improve our sales/customer onboarding/customer support processes?
What kind of messaging resonates with our customers?
How can we further engage our most vocal brand advocates?
Are we allocating departmental resources effectively?
Is there budget, tools, or other resources that we’re not leveraging to full capacity?
Which advertising channels exceeded our expectations – and why?
When it comes to threats, you could certainly begin by asking a series of questions like those above. However, it’s often quite easy to come up with a list of potential threats facing your business or project without posing questions beforehand. This could include “branded” threats such as emerging or established competitors, broader threats such as changing regulatory environments and market volatility, or even internal threats such as high staff turnover that could threaten or derail current growth.Tips For a Successful SWOT Analysis Essay
A Note on PEST Analysis
While we’re on the topic of internal versus external factors, I wanted to mention a tangential but entirely separate type of analysis closely relevant to SWOT analyses, known as a PEST analysis.Tips For a Successful SWOT Analysis Essay
Earlier, I mentioned that external factors such as changing regulatory policies and market volatility could be considered threats in a standard SWOT analysis. However, despite their importance, challenges like this are often highly nuanced and driven by dozens or hundreds of individual factors. This can place them beyond the scope or intent of a typical SWOT analysis. This is why many companies also conduct PEST analyses.Tips For a Successful SWOT Analysis Essay
SWOT analysis PEST analysis examples
This type of analysis is not what an exterminator does upon arriving at a roach-infested tenement. Rather, a PEST analysis functions very similarly to a SWOT analysis, only they’re concerned with four external factors: Political, Economic, Sociocultural, and Technological factors, to be precise.Tips For a Successful SWOT Analysis Essay
One of the main reasons it’s worth looking at PEST analyses is because many of the factors that could end up in a PEST matrix could also be relevant to the Opportunities and Threats in our SWOT analysis. The kind of political and economic turmoil we’ve seen in the United States during the past year, for example, could very well pose legitimate and serious threats to many businesses (as well as some opportunities), but these kinds of obstacles tend to be much more complicated than the opportunities and threats you’d see in most SWOT analyses, given their broader scale and often-complex underlying factors.Tips For a Successful SWOT Analysis Essay
SWOT analysis stages of economic bubbles
Image via Dr. Jean-Paul Rodrigue/Hofstra University
Obstacles identified in a typical PEST analysis also tend to be on much longer timeframes – it’s a lot easier and quicker to try and overcome internal challenges like high staff turnover than it is to wait and see if the economy picks up (or if the bubble will burst again). That’s why many larger companies conduct both SWOT and PEST analyses simultaneously – the SWOT analysis provides them with more immediate, potentially actionable roadmaps, whereas PEST analyses can be highly valuable when it comes to formulating longer-term plans and business strategies.Tips For a Successful SWOT Analysis Essay
Why Your Small Business Should Conduct a SWOT Analysis
If you’re a marketer or small-business owner, you might be wondering if SWOT analyses are practical or even feasible for smaller companies and organizations. Although there is definitely a resource overhead involved in the creation of a SWOT analysis, there are many benefits in doing so, even for the smallest of companies.Tips For a Successful SWOT Analysis Essay
SWOT analysis for small businesses
Image via Fundera
For one, conducting a comprehensive SWOT analysis provides a unique opportunity to gain greater insight into how your business operates. It’s all too easy to get lost in the weeds of the day-to-day workings of your company, and conducting a SWOT analysis allows you to take a broader, bird’s eye view of your business and the position it occupies in your industry.Tips For a Successful SWOT Analysis Essay
Another benefit of SWOT analyses is that this technique can be applied to a wide range of scenarios, not just as an overview of your business. You could use SWOT analyses to evaluate the potential strengths and weaknesses of a forthcoming advertising campaign, a planned content project, or even whether your company should be represented at a trade show or industry event.Tips For a Successful SWOT Analysis Essay
Obviously, it almost goes without saying that conducting a SWOT analysis allows you to identify what your company does well, where it could improve, and the opportunities and threats facing your business. However, conducting a SWOT analysis provides you with the opportunity to not only identify these factors, but also develop and implement tangible roadmaps and timelines for potential solutions. This can be beneficial in the creation of budgetary plans, identifying hiring needs (p.s. – WordStream is always on the lookout for great people!), and other mid- to long-term strategic planning.
How to Do Your Own SWOT Analysis
So, now we know what each element of a SWOT analysis is concerned with and the kinds of exploratory questions we can ask to get the ball rolling, it’s time to actually get to work and create your SWOT analysis.Tips For a Successful SWOT Analysis Essay
To illustrate how it works, we’ll create our own SWOT analysis example: a family-owned restaurant, with a single location, operating in an urban area.
The Four Quadrants of SWOT Analyses
Whatever you choose to call them, SWOT analyses are often presented as a grid-like matrix with four distinct quadrants – one representing each individual element. This presentation offers several benefits, such as identifying which elements are internal versus external, and displaying a wide range of data in an easy-to-read, predominantly visual format.Tips For a Successful SWOT Analysis Essay
Here’s the SWOT analysis based on our fictional restaurant:
SWOT analysis example matrix
As you can see, this matrix format allows you to quickly and easily identify the various elements you’ve included in your analysis.
For example, we can see that a great location, strong reputation, and seasonal menu are strengths in this particular analysis. Conversely, we can see that heightened competition from chain restaurants and the rising costs of ingredients are two of the four weaknesses identified by our fictional restaurant business.Tips For a Successful SWOT Analysis Essay
How to Act Upon Your SWOT Analysis
So, you’ve finally got your hands on a completed SWOT matrix. You’ve identified internal strengths and weaknesses, as well as external opportunities and threats. You’ve begun to see your company in a whole new light.Tips For a Successful SWOT Analysis Essay
Ideally, there are two stages of action you should take upon completing a SWOT analysis. First, you should attempt to match your strengths with your opportunities. Next, you should try to convert weaknesses into strengths. Let’s take a look how this works.
Acting On Your Strengths
One of the best things about the strengths you identified in your SWOT analysis is that you’re already doing them.
SWOT analysis example strengths
In our example above, the restaurant’s location, reputation, and seasonal menu are all strengths. This tells the fictitious company that it should continue to experiment with its popular seasonal menu. It also tells the company it should continue to develop and nurture the strong relationships with its regular customers that have strengthened the restaurant’s reputation in the community.Tips For a Successful SWOT Analysis Essay
Essentially, acting upon your business’ strengths consists of “do more of what you’re already good at.”
Shoring Up Your Weaknesses
Acting on the weaknesses you identified in your SWOT analysis is a little trickier, not least because you have to be honest enough with yourself about your weaknesses in the first place.Tips For a Successful SWOT Analysis Essay
SWOT analysis diagram weaknesses
Going back to our example, some of these weaknesses are very challenging to act upon. Going up against the considerable purchasing power of rival chain restaurants can be very difficult for smaller, family owned businesses. The restaurant is also struggling with its limited reach, the restrictions of a modest advertising budget, and is also failing to leverage the potential to increase sales by allowing customers to order food online through delivery apps like Foodler or GrubHub.Tips For a Successful SWOT Analysis Essay
However, that’s not to say all hope is lost. It might be harder for our example business to compete with a chain, but there are plenty of other ways small companies can be more competitive – such as by developing strong, meaningful relationships with customers, which was not only one of the company’s strengths, but also something chain restaurants simply cannot offer.Tips For a Successful SWOT Analysis Essay
The Opportunities section of your SWOT analysis is by far the most actionable, and that’s by design. By identifying opportunities by evaluating your organization’s strengths, you should have a ready-made list of targets to aim for.Tips For a Successful SWOT Analysis Essay
SWOT analysis diagram opportunities
In the example above, increasing consumer appetites for ethically produced, locally grown ingredients is a major opportunity. However, our restaurateurs cannot rest on their laurels – there’s still work to be done. In this example, this may involve investing in technical expertise to take advantage of the opportunities presented by food delivery apps, or sourcing locally grown produce more aggressively in an attempt to reduce costs.
It’s also important to avoid hubris or complacency in your opportunities. Even if you have an iron-clad advantage over every other business in your industry, failing to devote sufficient time, money, or personnel resources in maintaining that advantage may result in you missing out on these opportunities over time.
Every business’ opportunities will differ, but it’s vital that you create a clearly defined roadmap for capitalizing upon the opportunities you’ve identified, whether they be internal or external.Tips For a Successful SWOT Analysis Essay
Anticipating and mitigating the threats identified in your SWOT analysis may be the most difficult challenge you’ll face in this scenario, primarily because threats are typically external factors; there’s only so much you can do to mitigate the potential damage of factors beyond your control.Tips For a Successful SWOT Analysis Essay
SWOT analysis diagram threats
Every threat, and the appropriate reaction to that threat, is different. Regardless of the specific threats you’ve identified in your SWOT analysis, responding to and monitoring those threats should be among your very top priorities, irrespective of the degree of control you have over those threats.Tips For a Successful SWOT Analysis Essay
In the example above, all three threats are particularly challenging. To compete with the prices of its chain competitors, our restaurateurs may be forced to either compromise on their values to secure cheaper ingredients, or willingly cut into their profit margins to remain competitive. Similarly, economic uncertainty is virtually impossible to fully mitigate, making it a persistent threat to the stability of our example restaurant business.Tips For a Successful SWOT Analysis Essay
In some SWOT analyses, there may be some overlap between your opportunities and threats. For example, in the analysis above, the popularity of locally sourced ingredients was identified as an opportunity, and heightened competition was identified as a threat. In this example, highlighting the restaurant’s relationships with local farmers – further reinforcing the restaurant’s commitment to the local community and regional economy – may be an effective way for our restaurateurs to overcome the threat posed by the increasingly desperate chain restaurants vying for their customers.Tips For a Successful SWOT Analysis Essay
When compiling the results of your SWOT analysis, be sure to look for areas of crossover like this and see if it’s possible to seize an opportunity and reduce a threat at the same time.Tips For a Successful SWOT Analysis Essay
SWOT analysis is a widely used framework for strategic planning in which managers examine their company’s internal strengths and weaknesses as well as external opportunities and threats. However, companies that use this classic model run the risk of naval staring and favoring status quo strategies.Tips For a Successful SWOT Analysis Essay
Here’s some concrete advice on how to sidestep these pitfalls and make your strategy session more inspiring. Start by flipping the sequence of your SWOT agenda by placing the analysis of external threats and opportunities right upfront. This avoids getting stuck in a rabbit hole where you heatedly debate your own strengths and weaknesses while paying lip service to the far more complex and important changes happening in your external environment. This is especially key if you are in search of innovative moves and more dynamic business models.
How to Examine Opportunities and Threats
Rather than labeling external changes–for instance, an aging population or new regulations–as being good or bad, examine them without prejudice. Just call them forces or undercurrents and work hard to understand them.Tips For a Successful SWOT Analysis Essay
1. Keep your focus on the outside world (not yourselves). How is it changing and why? Be sure to cover key forces, including social, technological, economic, environmental, and technological drivers.
2. Discourage fragmentary thinking (such as discussing just one force or one issue in isolation of others). Adopt a systems view.
3. Be honest about what you can’t predict about the future: list the major external uncertainties and discuss how they may play out.
4. Assess which external changes you missed in the past and why. Are you any better this time around at scanning the periphery for weak signals? And if so, why?
How to Examine Strengths and Weaknesses
The same caveat applies here: be careful with your labels since what is a strength or weaknesses depends greatly on your strategy as well as your benchmarks of comparisons.Tips For a Successful SWOT Analysis Essay
5. Think in terms of core competencies rather than physical or intellectual assets, since the latter can be bought, traded, or imitated more easily than the former.Tips For a Successful SWOT Analysis Essay
6. Depict your business model visually with arrows and feedback loops, to show how various capabilities interact and relate to your revenue/profit model.
7. Labeling something as a strength or weakness implies a reference point. Decide what yours is. Is it more past, present, or future oriented? And are you measuring against the best in your industry or the best in the breed globally?
8. Include soft issues in your assessment, such as culture, organizational climate, leadership capacity, etc.
How to Set a Clear and Compelling Strategy
To the creative mind, there are no good or bad future scenarios per se, just good or bad strategies. You should be able to win in any new scenario if you think deeply about it and are willing to change your approach.
9. Agree on an overall vision (what to do and how) that is not only robust across future scenarios but is also sufficiently adaptive when needed.Tips For a Successful SWOT Analysis Essay
10. Clarify the balance between exploitation (strategically playing your current hand of cards) and exploration (creating new hands of cards through innovation).
11. Encourage leadership in all directions, not just top-down. Get buy-in through peer-to-peer initiatives and encourage bottom-up leadership where people educate their bosses.
12. Monitor key issues and scan for the unexpected. Try to see sooner how the external scene may alter and be fully ready to take advantage.Tips For a Successful SWOT Analysis Essay