What is a SWOT analysis and how to apply it to a small business?
A SWOT analysis is a strategic planning tool used to analyze the strengths and weaknesses of a company or organization. It helps us identify areas where we can improve, as well as those that are already great.
The acronym stands for “strengths, weaknesses, opportunities, and threats.” The key to using this technique is understanding what each of these terms means:
Strengths – These are things about your business that make it unique and special in its field.
Examples include: having multiple locations throughout the country; having an excellent product line; having an established reputation for quality service; being known for innovation (for example, developing new products); providing personalized customer service...etc.
Weaknesses – These are things about your business that may make it less competitive than other companies in your industry or even in other industries altogether.
Examples: They could represent a lack of resources such as money or personnel, poor management practices like not keeping up with technology changes (or worse), etc., but they also could indicate poor marketing strategy on behalf of your company which leaves potential customers unaware of how good you really are!
Opportunities – Your strengths should be able to yield opportunities when combined with certain strategies and tactics that will help you take advantage of them!
For example: You have been building up loyal customers over time through word-of-mouth advertising (which has helped build up brand recognition). Now you have some cash reserves from years past profits which allows you to invest more into marketing efforts so that people know who you are now and become aware when new products come out!
Threats – When there is something negative affecting one area — either internally within our own company or externally from competitors — then we need to find ways around it before it becomes overwhelming!
Examples: A threat can come from many sources including economic conditions (like unemployment) which affect sales volume or government regulations like environmental laws which affect production costs or natural disasters such as fires destroying buildings…etc. In any case if there is something negative impacting one area we need to find ways around it because if left unchecked this weakness will impact our ability to compete effectively against other organizations/companies!!
How to apply this framework for a small business?
Here is an easy way to see how this works:
1) Identify all the Strengths
2) Identify all the Weaknesses
3) List all possible Opportunities
4) List all threats
5) Make a Plan of Action to Capture Opportunities, Mitigate Weakness and Threats
6) Implement the Plan of Action
7) Measure the results
8) Redefine and Reset every year
This simple process can be used over and over again throughout any period during which changes occur within any given small business!!
Summary:
A SWOT analysis is a method of analyzing the strengths, weaknesses, opportunities and threats (strengths, weaknesses, opportunities and threats) that affect your business. The goal of a SWOT analysis is to help you identify what factors are most important in making business decisions. It helps you decide which areas need improvement and lets you prioritize them for action.
0 Comments