Discover New Opportunities, Manage and Eliminate Threats
SWOT is a really useful technique for understanding your strengths and weaknesses as a business; and for identifying opportunities open to you and the threats that you will face. When used in a business context, a SWOT analysis can help you carve a niche in your market in a way that best takes advantage of your talent and expertise.
Any business objective and goal setting should be completed after the SWOT analysis has been done; this allows achievable goals and objectives to be set for your organisation. However, before you carry out your analysis it is best practise to have completed all of the features and benefits for each of your products and services. Features and benefits focuses on each product or service what features it has and then what that means to the customer i.e. the benefit, because let’s face it that is
all the customer cares about. So, for example;
Once you have completed all of the features and benefits for each of your products or services you are then ready to complete your SWOT analysis; and remember;
- Strengths: Character of the business that gives it an advantage over others.
- Weaknesses: Characteristics of the business that put it at a disadvantage in relation to others.
- Opportunities: External chances to improve performance (e.g. make greater profits/introduce a new product line)
- Threats: External elements that could cause problems or trouble for your business
Here is the explanation in more detail;
How to Use a SWOT Analysis
Originated by Albert S Humphrey in the 1960’s, SWOT Analysis is as useful now as it was then. You can use it in two ways – as a simple icebreaker helping people get together to “kick off” strategy formulation, or in a more sophisticated way as a serious strategy tool.
Strengths:
- What advantages does your organization have?
- What do you do better than anyone else?
- What unique or lowest-cost resources can you draw upon that others can’t?
- What do people in your market see as your strengths?
- What factors mean that you “get the sale”?
- What is your organization’s Unique Selling Proposition (USP)?
Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market. Also, if you’re having any difficulty identifying strengths, try writing down a list of your organization’s characteristics. Some of these will hopefully be strengths! When looking at your strengths, think about them in relation to your competitors. For example, if all of your competitors provide high quality products, then a high quality production process is not a strength in your organization’s market, it’s a necessity.
Weaknesses:
- What could you improve?
- What should you avoid?
- What are people in your market likely to see as weaknesses?
- What factors lose you sales?
Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you don’t see? Are your competitors doing any better than you? It’s best to be realistic now, and face any unpleasant truths as soon as possible.
Opportunities:
- What good opportunities can you spot?
- What interesting trends are you aware of?
- Useful opportunities can come from such things as:
- Changes in technology and markets on both a broad and narrow scale.
- Changes in government policy related to your field
- Changes in social patterns, population profiles, lifestyle changes, and so on.
- Local events.
A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
Threats:
- What obstacles do you face?
- What are your competitors doing?
- Are quality standards or specifications for your job, products or services changing?
- Is changing technology threatening your position?
- Do you have bad debt or cash-flow problems?
- Could any of your weaknesses seriously threaten your business?
So let’s put this into a real life example situation; a start-up small IT consultancy business might draw up the following SWOT Analysis:
As a result of their SWOT Analysis, the consultancy may decide to specialize in rapid response, good value services to local businesses and local government. Marketing would be in selected local.
publications to get the greatest possible market presence for a set advertising budget, and the consultancy should keep up-to-date with changes in technology where possible.
Translating SWOT Data into actions to push the business forward:
Translating the SWOT issues into actions, are best sorted into (or if necessary broken down into) six categories, because in the context of the way that business and organisations work, this makes them more quantifiable and measurable, responsible teams more accountable, and therefore the
activities more manageable. The six categories would be as follows;
- Product (what are we selling?)
- Process (how are we selling it?)
- Customer (to whom are we selling it?)
- Distribution (how does it reach them?)
- Finance (what are the prices, costs and investments?)
- Administration (and how do we manage all this?)
Depending on the situation a SWOT analysis can produce issues which very readily translate into (one of the six) category actions, or a SWOT analysis can produce issues which overlay a number of categories. The aim is now to work on translating;
- strengths (maintain, build and leverage),
- opportunities (prioritise and optimise),
- weaknesses (remedy or exit),
- threats (counter)
into actions (each within one of the six categories) that can be agreed and owned by a team or number of teams. I will leave you with one final example of how our start up IT Consultancy could develop and interpret the SWOT data into a plan of action.
I hope you have found this useful.
Happy Selling
James Randle – Marketing Strategist – Helping you successfully grow your business through powerful marketing techniques – Sales & Marketing Coach/Mentor
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