SWOT analysis, acronym of “Strengths, Weaknesses, Opportunities, Threats”, is a strategic planning tool that allows you to dig deeper in terms of understanding the current situation of your business and taking future steps more firmly and accurately.
How closely are you dealing with the growth of your brand? Is your ego bigger than your brand, or do you have an objective point of view? Or has your brand turned to the Sisyphus’s boulder? Do you keep carrying the boulder uphill and watch it roll down in the end? Maybe it’s time to take SWOT analysis seriously and implement it into your strategy.
Why is SWOT Analysis necessary for your business?
SWOT analysis forces you to be brutally honest about your current position, capability, potential, brand awareness, business strategy and goals. With its easy adaptability, SWOT analysis can be carried out separately for both your business and your brand or product, as long as they match your overall brand and business strategy.
Strengths: What exactly are you good at? What exactly are you good at according to others? What makes you stand out in the crowd? What unique skills put you one step ahead?
Weaknesses: At what points do you feel yourself lacking? In which areas are your competitors superior to you? What do others know about your weak and disadvantaged sides?
Opportunities: What trends, business or market opportunities can you make use of that will positively impact on and contribute to your business? Anything that will add value to your organization counts: geographical advantage, a more profitable supplier, a lucrative partnership.
Threats: Are your competitors doing anything that could jeopardize your business, put you out of the market, or harm your position in the market? If so, have you found out what they are and took any precautions against these scenarios? For example, do you have urgent action plans and have you allocated a fund from your budget for such cases ? How flexible are you against threats?
In SWOT analysis, external factors such as opportunities and threats are more insightful when relevant tools such as PEST analysis, market planning, and methodologies (like Michael Porter’s 5 forces Model) are incorporated in your study. While you have direct influence and control over the internal functioning of your company, there are external factors beyond your control that you cannot easily and quickly turn to your advantage. To get a holistic view, you should sift through the internal and external factors separately, and then put all the pieces together in a SWOT analysis.
It is crucial to have your entire team get involved in to work on the analysis. Work with your team to identify areas where you are lacking, weak, and good at. The aim of this study is not to create a colorful scheme that is pleasing to the eye, rather to identify the spots you are really good at, and on the other side to brainstorm to improve your business by confronting the areas where you are bad and ignored.
Internal Factor Evaluation
- Core skills, authenticity, expertise, and experiences
- Product range and R&D activities
- Similarities to competitors. Are there things that are commonly used in your industry but you missed out?
- Differences. What is it you do differently that will give you a competitive advantage? What makes you different from the competition?
- Trade secrets, patents and trademarks
- Value, benefit, price, quality, geographic advantages
- Technology, finance
- Sales and marketing
- Customer service, pr and management
- Vision, mission, ethos
- Organizational structure and management
External Factor Evaluation
- Social, economic (macro and micro) and political environment
- Price setting and market driven pricing
- Government or industry rules and regulations
- Supply and distribution
- Market and product trends and innovations
- Customer bias and consumer behaviors
- Technological changes and advances
- Competition and branding practices in the market