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Running a business is a lot harder than one may think. It’s not as glamorous as what fictional characters have made it appear, where assistants are out on early coffee runs to get you your morning fix, or when businessmen start cramming the elevators with their eyes glued on their phone screens and a laptop bag on one hand. You may also see personal SWOT analysis examples.
Business operations tend to get a lot more stressful on certain days than most. Business owners, marketers, and other stakeholders spend hours on end brainstorming various strategies and campaign ideas in an attempt to increase brand awareness, enter new markets, and boost sales. During these sessions, a professional SWOT analysis is often conducted to assess the internal and external factors that influence the success (or lack thereof) of a business.
Performing a SWOT analysis is actually a lot more fun than what most people assume. If you do it right, it won’t take so much of your time to conduct, and it allows you to look at your business from a whole different perspective. This will help you develop a strong business strategy as you learn to consider your strengths and weaknesses, as well as the opportunities and threats the business currently faces in the marketplace.
SWOT is actually an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. This refers to the strengths, weaknesses, opportunities, and threats that your business faces in its internal and external environment.
This technique was devised by an American businessman and management consult Albert Humphrey, while he was working for the Stanford Research Institute in the 1960s and 1970s using data from Fortune 500 companies. Although he never claimed to be the creator of the SWOT analysis, many authors still credit him for the contribution. You may also see HR SWOT analysis examples.
SWOT diagrams or matrices make it easier for companies to evaluate a project or business venture by focusing on the items identified in each factor. This usually consists of four boxes (or spaces, depending on the shape design), with one designated for each area. You may also like hospital SWOT analysis examples.
This is an internal factor that presents an analysis on the company’s edge over its competitors. Companies often make these core marketing advantages the focal point of their marketing messages as they try to differentiate themselves from competing businesses. This could revolve around anything from your reputation to your store locations. You may also see manager SWOT analysis examples.
Weaknesses are internal to the company. Similar to one’s strengths, this is something that a company can change or improve on with a few tactics. It’s important for a company to understand its weaknesses so that they could identify what areas they need to improve on along with those that are inherent to the nature of their business. You may also like internal audit SWOT analysis examples.
The possibility to grow and branch out to a whole new market is one example of an opportunity. Exploring untapped opportunities can help company leaders find ways to prosper in the marketplace. New and emerging trends are often seen as an opportunity to keep up with competitors and to stay relevant in the industry. After all, a business that fails to grow along with its market is bound to fall behind. You may also check out marketing SWOT analysis examples.
While this may seem like the least enjoyable area to study, it’s vital for companies to understand the external threats that affect their business. This is to ensure that the company is fully aware of sudden changes in the market so that they could develop various strategies to overcome them.
Apart from the competitive factor, environmental standards, conditional changes, and government regulations may lead to price hikes and the limited use of certain resources. Technological advances or changes can also be an alarming factor for companies that fail to adapt accordingly. You might be interested in personal SWOT analysis examples.
One thing to note about a SWOT analysis is that it merely provides us with an initial overview of whether or not an opportunity is worth pursuing. It functions as a simple analysis system designed to evaluate the strategic position of a particular company in its field of operation.
However, a simplified view of a company’s strengths, weaknesses, opportunities, and threats won’t be enough for a company leader to make rational decisions. In reality, there are more factors that leaders must consider when developing business strategies. This is why it is necessary to conduct a further analysis to ensure that every significant aspect of a company is thoroughly assessed. You may also see hotel SWOT analysis examples.
The main purpose of a SWOT analysis is to allow company leaders to study the internal and external environments of a business by identifying and analyzing the strengths and weaknesses of the organization, as well as the opportunities and threats to which it is exposed. You may also see retail SWOT analysis examples.
Taking a closer look at this technique, we can also see that part of the purpose of a SWOT analysis is to assertively identify the factors that influence the functioning of an organization. This provides useful information in the strategic planning process to make it easier for business owners and marketers to arrive at well-informed decisions. The knowledge generated from the analysis will then serve as a basis for creating actionable tactics that are to be carried out by company employees.
Keep in that for a company to grow, it must first identify where it currently stands in the marketplace. What separates you from competing businesses? What do competitors have that you don’t?
What are the factors that go beyond your control? How do these factors affect business operations? It’s important for the company to gain a better understanding of itself (and where it stands) in order to establish timely, relevant, and realistic goals that may be achieved within their means. You may also like SWOT analysis of college examples.
SWOT diagrams or matrices can come in handy whenever you need to decide on embarking on a particular venture or strategy or not through a simple analysis on the pros and cons. Though you can find many SWOT analysis templates online, all in different types of formats, you do have the option to create one from scratch for a personalized look and feel.
Here are five steps on how you can conduct a professional SWOT analysis:
The first thing you need to do before you can begin with your SWOT analysis is to clearly define your objective. Why do you need to do a SWOT analysis? Is it a personal SWOT analysis to determine your capabilities and limitations as a graphic artist, or is it a business SWOT analysis to help you decide if investing in a new product line is a risk worth taking?
It’s best to note down your objective at the top of the page to keep you on track.
Though a SWOT analysis can be done using different shapes and sizes, most company leaders prefer drawing a large square and dividing it into four smaller squares to form a grid. This is done to properly categorize each factor into its designated areas. You may also see competitor SWOT analysis examples.
Be sure to leave enough space for writing to prevent an overlap of ideas. It’s best to use a general application like Microsoft Excel or SmartDraw for a quick and easy construction. This way, you won’t have to worry about drafting the general structure of the diagram all over again whenever you need to conduct a SWOT analysis.
Label each box in the grid according to the sequence of the acronym SWOT. Write the word Strengths inside the top left box of the grid, Weaknesses for the top right box, Opportunities within the bottom left box, and Threats for the last remaining box. Adding titles will make it a lot easier to distinguish one factor from the rest. You can even use different font sizes or text colors along with these titles for a more distinctive look. You may also like industry analysis examples.
This is where you can start adding a list of factors that affect the project or venture to the applicable boxes. Some components of a SWOT analysis may be qualitative and anecdotal, while others may be quantitative and empirical in nature. Regardless, make sure you write these factors in a bullet form to keep the content of your analysis organized. Your general analysis should also be based on proper facts that have actual data to support them. Figures may also be added if possible.
Finally, analyze what you have written and see if the positive outcomes outweigh the negative. If they do, then it’s a good sign that shows you may carry out the objective as desired. If they do not, certain adjustments need to be made, like an improvement in a certain area, or else the plan should simply be abandoned for the benefit of all. You may also check out critical analysis examples.
A professional SWOT analysis is the perfect analysis medium for existing businesses and new businesses alike. This enables existing businesses to evaluate a changing environment and respond proactively, and it allows new businesses to develop well-defined strategies as part of their planning process. You may also see company analysis examples.
And since there is no “one size fits all” type of business plan, studying your business in terms of its SWOTs provides your business with direction to avoid potential obstacles along the way. So if you find yourself in need of a SWOT analysis, save yourself from headaches by referring to these guidelines and examples.