Business growth doesn’t come without its share of challenges and opportunities. But when those arise, how do we prioritise them?
If you’re faced with multiple challenges, which issues need to be addressed first? And which of the new initiatives should take precedence over the others?
The answer lies in the SWOT analysis, a framework to help you maximise opportunities and minimise potential roadblocks on your path to success.
Whether you’re creating a start up or are supporting your existing company, a SWOT analysis is a simple but powerful tool to shape your business strategy. In this guide, we’ll show you how to carry out a SWOT analysis, run through its benefits, show the process in action, and provide you with a template to help get you started.
What is a SWOT analysis?
A SWOT analysis is a strategic planning technique to assess your business through the lens of the following aspects:
You can identify available resources for your organisation to reduce the chances of failure through understanding any blind spots and eliminating hazards.
This simple practice lets you make unbiased evaluations of things such as:
• Your business or brand
• Market positioning
• New projects or initiatives
• Specific campaigns or channels
The SWOT Analysis process: step-by-step
Step 1: Get the right people together
The beauty of a SWOT analysis is that the outcomes you reach aren’t limited to founders and senior management – anyone can pitch in. In fact, it’s certainly a case of “the more, the merrier”; the greater the volume of input, the more suggestions you have to work with.
Make sure the people you gather are from different parts of your company, and that you have a broad representation of departments and teams. Different groups within your company will vary in their perspectives – a critical component of a successful SWOT analysis.
By engaging your employees in the process, you may see more buy-in on the strategic decisions that the analysis resulted in too.
Step 2: Identify your objective
Before writing anything down, decide what you need to evaluate through SWOT. Being specific allows you to tailor your evaluation and uncover actionable insights without being too broad.
Step 3: Host a brainstorming session
Once you’ve agreed an objective, host a brainstorming session with your chosen group. Here, you’ll list strengths, weaknesses, opportunities and threats or ask participants to create and submit lists individually.
Whichever approach you go for, include everything that comes up in each category. Each observation is crucial at this stage; just make sure everyone’s voice is heard and that you note down all suggestions.
Step 4: Rank the ideas
When you’ve organised all your ideas, it’s time to rank them. Everyone in the group should have several votes to distribute as they see fit. Soon, you’ll have a prioritised list of ideas with a clear pattern of the areas you need to focus and decide on regarding your business strategy.
What are the benefits of a SWOT analysis?
• Cost-effective – it costs nothing to conduct a SWOT analysis, nor does it require any technical skill or formal training. Anyone who understands the business can perform it.
• Highly applicable – because it can be used to identify any environmental factors that play either a favourable or unfavourable role in a particular objective, you can use SWOT analysis in a wide range of applications, from competitor analysis to strategic planning.
• Promotes discussion – since it involves discussing core company strengths and weaknesses, SWOT analysis underlines the important role that employees have to drive an organisation to succeed, allowing everyone to be on the same page throughout the SWOT analysis discussions.
• Provides a visual overview – the SWOT analysis template usually takes the form of a square, with each quadrant representing Strengths, Weaknesses, Opportunities and Threats. This visual arrangement gives you an overview of the company’s position in a simple, digestible way.
• Integration and synthesis – carrying out a SWOT analysis means information, whether it’s known or recently acquired, can be integrated and synthesised together, organising disparate sources in one place.
• Fosters collaboration – through the discussion mentioned above, SWOT analysis creates a greater sense of collaboration and exchange of information between teams and departments that would rarely interact otherwise. Through this, you can solve problems, resolve disagreements, and instil a stronger, more harmonious working environment.
Your SWOT analysis template
To help get you started, your SWOT analysis quadrant should contain:
• Strengths – what are you doing well? Think about the things that are going in your favour, along with the unique selling points your competitors simply don’t offer.
• Weaknesses – what’s getting in the way of your goals? It could be areas of the business that are least profitable, certain resources that are lacking, or what’s costing you too much money. Inputs from different departments are crucial here; they’ll be able to see weaknesses you may not be aware of.
• Opportunities – after listing weaknesses, identifying opportunities should be easier. Depending on your objective, ask questions like “what new target audience do I want to reach?”, “how can we stand out amongst our competitors?”, and “what technologies do I want to use to make business more effective?”
• Threats: What obstacles might stop you from realising the opportunities above? Whatever they are, writing them down helps you to be more objective in your evaluations.
An example of SWOT analysis in action
SWOT analysis can be applied to all types of businesses, whether they’re large multinationals or fledgling SMEs. Considering the guidance above, here’s what a SWOT analysis might look like for an energy business:
1. Established infrastructure
2. Positive relationship with existing customers
3. Rising investment in energy procurement
1. Rising cost of carbon fuel types
2. High employee turnover in some departments
3. Negative reviews from unhappy customers
1. Increased incentives for energy-efficient practices
2. Expanding market
3. Growing business with new recruitment opportunities
1. New and emerging competitors
2. Increasing move towards low-carbon energy
3. Climate change policies
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