Business Standpoint: SWOT Analysis.

Knowing where your business is at every given point in time is instrumental to business growth. A SWOT analysis is one of the ways to do this.

A SWOT Analysis covers both the internal and external aspects of the business, the things within the control and outside the control of the business.

SWOT is obviously an acronym. It stands for Strengths, Weakness, Opportunity and Threat.

Strengths and weaknesses are the internal features, things that the business can control and change, if need be. Opportunities and threats on the other hand are beyond the direct control of the business, they are external factors that affect the business.

Strengths, as the name implies, are those things that the business is good at, the resources you have that make business easier for you, your product features, etc.

Weaknesses involve the things that you are not good at as a company. Things that your business lacks, what the competitor does better, etc. they are negative factors that you might have to work on to improve your competitive advantage, since it is within your sphere of control.

Opportunities include ways you can leverage your strengths, market trends available, government policies that are favorable, etc. they are external factors that can be used to your advantage.

Threats on the other hand are things that could hamper the growth of your business that you don’t have direct control over. This includes, what your competitors are doing, their own advantage, unfavorable government policies, etc.

A proper analysis of all these factors is what a SWOT Analysis is all about. The results from the analysis ought to shape your future business decisions and the direction your business should go. It also helps you with deciding the right strategy for your business. It makes you look at your business in new ways and with new lenses, seeing better ways to leverage your strengths and tap into the possibilities in your industry or market.

Most existing companies can feel like SWOT analysis is basically for new businesses, but that doesn’t seem correct. Doing a SWOT analysis will help every business, at any stage of growth and existence.

To do your SWOT analysis the right way, there are a couple of questions it has to answer and they are:

• When talking about your strengths, you have to ask questions like:
• What is our competitive advantage?
• What assets (human and material) do we have?
• What well performing product do we have?
• What successful business processes do we have?

In terms of weaknesses, questions like these are important:

• What resources are you lacking?
• What underperforming products do you have?
• What human assets do you lack?
• What material asset do you lack?
• What can you improve on?
• Is your location ideal?

Having answers to these questions will give you a good idea of the opportunities available:

• What trends exist in the market?
• What new regulations are in your industry that are favorable?
• How well is the market growing?
• What new market segments are there to explore?
• What new technology or innovation is out there?

To understand the threats to your business, answer the following questions:

• What threatening new regulations are there in your industry?
• What do your competitors do well?
• What consumer trends threaten your business?
• What market trends and consumer behavior are threatening the business?
• What technology disruptions can threaten your business operations?

SWOT analysis is something that as a business owner or manager, you ought to do for the company, and recurrently too. This will help you understand your business better, find solutions to your weaknesses, mitigate the risks that threats bring, exploit opportunities, and develop goals and the strategies for achieving them.