S.W.O.T analysis will help you better understand how to diagnose your business. Read here to learn how to do a S.W.O.T analysis and improve business.
What if there was an easy technique to make your business stronger every month? As it turns out, S.W.O.T analysis is the perfect tool to help your business achieve its goals. However, many people do not know enough about what S.W.O.T is and how it works. Keep reading to discover our S.W.O.T analysis example and definition!
What Is S.W.O.T Analysis?
S.W.O.T is actually an acronym. It stands for Strengths, Weaknesses, Opportunities, and Threats.
S.W.O.T analysis is an honest evaluation of what your business does well and what it could stand to improve. The goal is to use this analysis to develop a business strategy that emphasises your strengths while finding ways to address your potential weaknesses and acts as a visual aid to evaluate the holistic dimensions of your business.
Benefits of S.W.O.T Analysis
The S.W.O.T analysis remains popular because it has a number of benefits. The first is the simplicity of it: you can present analysis findings in a single image, making it easy for anyone and everyone to process. A good S.W.O.T analysis is also thorough. By looking at opportunities and threats in addition to strengths and weaknesses, you are able to create both short and long-term plans for success. A S.W.O.T analysis is very versatile. You can apply it at the macro level to your entire business or on a micro level to a smaller team, division, or individual within the company. Finally, a S.W.O.T provides insight into the external changing environment and provides management with the tools to gain or sustain the competitive advantage.
Drawbacks of S.W.O.T Analysis
The S.W.O.T analysis is still widely used because of its many benefits. However, this form of analysis is not without its drawbacks. First, a good S.W.O.T analysis is only as good as your information collected. If you put together analysis without very much detailed data and research, then you will come out with flawed results. Second, it can sometimes be difficult to categorise certain things. Sometimes, changing external factors, such as customer attitudes, means something could be a threat or an opportunity. Finally, for all the S.W.O.T analysis opportunities, there is the risk of oversimplification. By reducing complex data into a handful of talking points, you risk overlooking the need for complex solutions.
SWOT Analysis Example
Now you know a bit about what a S.W.O.T analysis is. Now, the big question: how to do a SWOT analysis? We’ll answer this by way of example.
For example, if you managed a Chinese Fusion restaurant. Your strengths might include that you offer customers a convenient location and that you are a fast and affordable alternative to going to a drive through. Your primary weakness might be that your business is new. As such, you might be struggling to pay back some of your start-up loans. Opportunities might represent factors such as the city population increasing and/or visitors increasing. This means opportunities for greater profit. Finally, your threats might be other nearby restaurants targeting your demographic. In this way, they are the primary obstacle to your success.
The Bottom Line
Now you have a good S.W.O.T analysis example. But do you know who can help you analyse your business? At S.M.A.R.T. Turnaround, we are experts at business strategy. With our analysis, you get all the benefits and none of the drawbacks.
To see how we can reshape your business, contact us today!