When starting a business venture, there are a couple of things that one must consider before opening its doors to the public. After all, a business does not only involve offering a product or service and earning a profit, it’s also about developing in the industry it is in. To do this, the company must be able to determine the internal and external factors that contribute to its performance,
A SWOT analysis, which is also referred to as SWOT matrix, is a planning method that evaluates the strengths, weaknesses, opportunities, and threats of a given organisation. Through this, the company may work on resolving existing issues and eliminating the possible threats.
A SWOT analysis will guide a company in its decision-making process, whether this is a major or a minor one. To be more specific, here are some instances when a company should consider a SWOT analysis:
Competitive advantage. In the industry, competition is tight. It’s important for a company to determine what they could do better than those existing in the marketplace. They could focus on their weaknesses and how they could improve such.
Entering a new market. Business analysis development is about constant innovation. Launching a new product line can be a huge step for a company. Opportunities and threats must be assessed thoroughly before it is implemented.
Writing a business plan. In developing a business plan, a SWOT analysis will help determine key factors that need to be addressed. This will make it easier to resolve issues that may greatly impact the company’s operations.
List important factors. Anything that proves to be significant to the subject matter should be stated in each category. Providing too much information, of which some may be unnecessary, won’t provide much clarity to your analysis.
Be specific. You must provide valuable information for each item listed. Plainly stating that a product is doing well in the market is too broad, it’s best to elaborate and provide supporting details for such claim.
Provide facts. This would be based on research and market sales. It’s best to include the negative and the positive aspects as well.
What makes SWOT analysis beneficial is that it makes it easier to manage things. Generally, SWOT analysis may be done during the process of proposal, development, and maintenance. With this simple analysis, you can identify factors that either pose a negative or a positive impact to your current business process.
For an effective SWOT Analysis, you need to determine the internal and external factors that may contribute to such. The following are the areas that may contribute to this:
Internal factors (Strengths and Weaknesses)
This would include the readily available resources.
External factors (Opportunities and Threats)
This consist of the factors beyond the company’s control.