A SWOT analysis tool is one of the most effective business and decision-making tools. SWOT analysis can help you identify the internal and external factors affecting your business. Show A SWOT analysis helps you:
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The results generated by a SWOT analysis makes up part of your business planning. It can also help you to:
Using SWOT analysis in your businessYou should consider doing a SWOT analysis to give you a framework for understanding the state of your business and where you have opportunities for growth or fixing any faults in your operation. To conduct a SWOT analysis, you must look at both the internally and externally focused activities of your business.
Internally focused activities are matters generally under the business's control, including:
You can use the SWOT analysis tool (see below) to identify current strengths and weaknesses in your internally focused activities. To assist your analysis, consider:
Externally focused activities are the activities that affect your business but are generally outside its control, including:
You can use the SWOT analysis tool (see below) to identify opportunities and threats for externally focused activities. To assist your analysis, you might also consider:
You can use a SWOT analysis to help you review your entire business, but you can conduct an analysis focussing on 1 or 2 specific issues. SWOT analysis can:
A SWOT analysis should generate a brief list of issues relevant to the 4 categories—strengths, weaknesses, opportunities and threats. The analysis of these issues helps the business make meaningful changes. For example, if the SWOT analysis has indicated a staffing weakness, a more detailed human resourcing plan may be required.
A SWOT analysis is not a perfect tool—it has some limitations. A SWOT analysis:
Tips for completing a successful SWOT analysisA SWOT analysis helps you assess internal factors that might affect your business (strengths and weaknesses) and external factors (opportunities and threats). You will need to review and act on the results from the SWOT analysis. The following tips can help ensure your SWOT analysis is successful:
Download the SWOT analysis template and conduct your own analysis of internal and external issues that might be affecting your business. Or you can read the example SWOT analysis below and replace the details with your own.
The SWOT analysis tool can be used to identify existing strengths and build on them. Consider the following:
Record and review your business strengthsUsing the questions above, complete the strengths section of the SWOT tool template or example analysis below for your own business. Make sure you also record this information in your business plan template.
The SWOT analysis tool should be used to identify and limit weaknesses in your business. Consider the following:
Record and review your business weaknessesUsing the questions above, complete the weaknesses section of the SWOT tool template or example analysis below for your own business. Make sure you capture and document this information in your business plan template.
The SWOT analysis tool can be used to identify and explore opportunities. Opportunities are the external factors that, if used effectively, can help you build your competitive advantage. Consider the following:
Record and review your business opportunitiesUsing the questions above, complete the opportunities section of the SWOT tool template or example analysis below for your own business. Make sure you capture and document this information in your business plan template.
The SWOT analysis tool will help you to identify and counteract threats and build resilience. Threats include external factors that may be beyond your control. Consider the following: Record and review your business threatsUsing these questions, complete the threats section of the SWOT tool template or example analysis below for your own business. Make sure you capture and document this information in your business plan template.
The following is an example of a SWOT analysis conducted by a business trying to decide if they should introduce a new product to their range. To get the most out of a SWOT analysis, specific statements should be made in each category. For example, rather than simply list 'competitors' as a threat, specific details about how competitors are a threat have been included. Once you have read through this example SWOT analysis, you can type your responses to build a SWOT analysis for your business.
Internal Strengths - Excellent sales staff with strong knowledge of existing products - Good relationship with customers - Good internal communications - High traffic location - Successful marketing strategies - Reputation for innovation Weaknesses - Currently struggling to meet deadlines - too much work? - High rental costs - Market research data may be out of date - Cash flow problems - Holding too much stock - Poor record keeping External Opportunities - Similar products on the market are not as reliable or are more expensive - Loyal customers - Product could be on the market for Christmas - Customer demand - have asked sales staff for similar product Threats - Competitors have a similar product - Competitors have launched a new advertising campaign - Competitor opening shop nearby - Downturn in economy may mean people are spending less
After you've compiled your SWOT data, complete an analysis by:
Note that the same issues may appear in different quadrants—for example, some identified opportunities may help overcome a weakness or build on an identified strength within the business. Occasionally, a SWOT analysis may identify a threat that prompts a change in the business model. You should regularly review the action plans you have in place to ensure that any connections between issues are handled and actions are coordinated across the business. You must also consider the constantly changing external and internal business environments. Conduct regular SWOT analyses to ensure you are prepared for these changes and can build on your business's strengths for success. Learn about deciding how to identify what SWOT actions to prioritise.
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