Understanding your company’s position within your market or industry and knowing how and where you can grow is critical for any business owner. This knowledge allows you to strategically develop your company rather than wasting your efforts trying to expand into a market that doesn’t align with your business or being steamrolled by a surprise competitor.
What is a SWOT analysis?
SWOT, which stands for strengths, weaknesses, opportunities, and threats, is a type of analysis that helps you develop your business strategy by comparing internal factors (strengths and weaknesses) against external factors (opportunities and threats). Examples of internal factors include things that you have control over and can change, like your staff or your intellectual property. External factors are things that you cannot control, like consumer trends or competitors.
A traditional SWOT analysis takes your strengths, weaknesses, opportunities, and threats and organizes them into a list that is presented in a two-by-two grid.
A SWOT analysis has four quadrants:
The analysis provides you with an accurate picture of what your business is currently doing well and how it can improve. “[A SWOT analysis] gives you a firm grasp of what is affecting your business internally and externally,” said Lynne Pratt, creative content director at Virtual Solutions Global. “By carefully evaluating the analysis, a business can find new ways of progressing and achieving growth.”
Why should you do a SWOT analysis?
A SWOT analysis gives you a detailed, unbiased overview of your business as a whole or a specific product or campaign. It can also help train your brain to consider every factor that can possibly affect your project or business. When you’re facing a tough issue or if you’re just unsure of your current strategy, a SWOT analysis illuminates details so you can formulate actionable plans based on each of