Whether it concerns your personal life or your business, implementing changes and new ideas should be based on earlier, solid analysis, like for example market analysis. One of the most known ways to systemize your thoughts is conducting a SWOT analysis. At this point, you may think: what does SWOT stand for? The name of this analysis is based on four first letters of words:
What is SWOT? Why is it important? The technique of dividing factors of analyzed phenomena into 4 groups allows you to pay attention to the key aspects. Moreover, it ensures that your analysis is insightful and that you have not omitted any element.
Where to start?
Firstly, you should know how to construct the analysis from a visual point of view. You can prepare a matrix in a preferred computer program, with templates available online or on a classic piece of paper. The most common way of conducting a SWOT analysis is dividing the area into 4 zones. Each part is supposed to represent a different element of the analysis (strengths, weaknesses, opportunities, threats).
There is no one way of organizing SWOT analysis visually. Nevertheless, it has to be legible and logical. It does not matter whether you conduct a SWOT analysis on a business or yourself. The order of the 4 categories that were mentioned above should be kept.
The key issue while conducting a SWOT analysis
After making sure that you know what SWOT analysis is and how it looks like, you should focus on the process of conducting it. To do so correctly, you need to realize the difference between external and internal environment. Strengths and weaknesses describe features of interior elements. Opportunities and threats, on the contrary, are considered as external factors that determine the outside setting.
Proceeding to the analysis, you can organize a brainstorming session that will provide you with valuable ideas. When it comes to formulating thoughts, you can do that either in the form of a full-sentence or just a short phrase. You will probably find the second option more useful since the analysis will give an impression of being well organized.
Step by step
While conducting a SWOT analysis on a business, you should try to think from the perspective of someone outside the organization. As a result, you may gain a surprisingly valuable outlook that will make your analysis more insightful. Of course, if you are conducting a SWOT analysis on the company you work in, use all the knowledge you have. You can point out and identify the most important factors that often a person from outside cannot have.
Concentrating on the first half of the analysis, you have to go through you business’s strengths and weaknesses. Specify the internal environment and its aspects.
In the “strengths” part, you should focus on your company’s features that distinguish you from your competitors. Think about details that make your business unique and attractive to customers.
On the other hand, what makes your business vulnerable? What could have been improved? In general, aim your attention to weak spots of your company to write down weaknesses.
Conducting a SWOT analysis requires you to scrutinize also the external environment. You should focus your attention on the market (read more about market research here) to acknowledge opportunities and threats.
Opportunities are all the chances that you can encounter and make use of to improve the performance of your company. Those are both favorable circumstances narrowed to the area you work in or happening in an overall economic, social and political environment.
Threats are related to external factors that might put your business in danger. Despite elements that constitute a given market, you cannot forget about the competition that might significantly impact your business.
Why is conducting a SWOT analysis never a bad idea?
Thanks to SWOT analysis, you get a deeper understanding of the progressing processes regarding your business. A particular value is the in-depth knowledge of multidimensional aspects that significantly influence the company’s future actions and decisions. Having that in mind, you can take the right direction and adjust your strategy to the the market’s dynamic situation.
Now that you know what SWOT stands for and how to conduct both personal and business SWOT analysis, you can gain more awareness. Many challenging questions are waiting out there to be answered, and SWOT analysis will help you overcome them in a simple yet effective way.
Check also an article about competitive analysis.