SWOT Analysis is a strategy that helps us analyze the strengths, weaknesses, opportunities and threats of businesses. It is important for analyzing the competitive position of the business and developing strategies accordingly. It consists of the initials of Strengths, Weaknesses, Opportunities and Threats. You can personally conduct this analysis for yourself. For example, you can identify your weaknesses and then define strategies for yourself to eliminate these weaknesses. Basically, SWOT analysis lets you see a bigger picture.
Strengths and Weaknesses relate to internal factors, which are easily accessible resources and experiences. Some of these internal factors are equipment, employees, and sources of income.
External Factors are usually things that you or your company do not control. They are Opportunities, and Threats. Some external factors are as follows: Technological developments, economic trends (local, national, international), political regulations etc.
How to do a SWOT Analysis?
Strengths define the aspects of a company (Or you, if you are conducting the analysis yourself) which sets you apart from the others in the competition. For example; the technology you use can be your strength.
You can reveal the strong points of your business by considering these questions:
- What are you doing better compared to your competitors?
- Which aspects of you would your competitors find strong?
- What makes your business unique?
The most important part in a SWOT analysis is the part where the weaknesses are determined. Weaknesses prevent the company or person from being more successful. Therefore, it is very important to be realistic while analyzing the weaknesses. These aspects are the internal factors that need improvement.
You can ask these questions to identify weaknesses:
- What are your company’s shortcomings compared to your competitors?
- What are the aspects you failed?
Opportunities are external factors. They are very important for giving competitive advantages to a business.
- Is the sector in which your business is located developing?
- In which market are there opportunities for your business?
- Are there any new technologies that will make the job easier?
- How can you turn what your competitors find difficult, to your advantage?
- What are the government policies regarding the market you are in? Can they be turned into an opportunity?
Threats are the part in the SWOT analysis where you need to give the most attention to. Threats refer to the external factors that can harm the business. For example; Increasing material costs, due to the increase in exchange rates, can be a threat to your business.
- What types of obstacles are in front of your business?
- Can rapidly advancing technology affect your business and position?
- Does your business have financial problems?
- How could the change of the world negatively affect you?
SWOT Analysis Example
You can free download and use the SWOT Analysis templates free.