Dear M & M:
I keep hearing about conducting a SWOT analysis for my business. What are they talking about?
A SWOT analysis will help you to take a look at internal operations and the external environment that you operate in. Looking at your strengths and your competitor’s weaknesses will allow you to exploit opportunities that exist. It also identifies weaknesses you need to improve on and recognize strengths your competitors have in the marketplace.
A SWOT analysis refers to identifying your Strengths, Weaknesses, Opportunities and Threats.
Take four blank piece of paper. Write one of these topics at the top of each of the four pieces of paper (STRENGTHS, WEAKNESS, OPPORTUNITIES, and THREATS). The first step is doing an internal scan of your own organization. Look for strengths and weaknesses in your company.
What are some of the things you are good at? Do you have the best location, friendliest employees, newest and latest products and services, or competitive pricing? What makes you unique? Why do people do business with you? Now let’s take a look at what you are bad at.
Does your company have; poor communications with your customers, a high employee turnover rate, are a large percentage of your sales returned, are you never open regular hours, are you not keeping up with the latest trends, are you not making a profit in the business, or it could be something as simple as not enough parking. Next, we want to do an external scan.
You are looking for opportunities and threats you see outside your company. Is there anything you see coming up in the future like a disrupting technology that can affect you or threaten your business? What is it about your competition that worries you the most? How easy is it for a competitor to open a similar business?
Is there any legislation that is in place or about to take effect that could cause harm or damage to your business? How has your industry changed in the last 5 years? What does your competition do poorly? Do you see anything that looks like an opportunity for your business?
In conclusion, a SWOT analysis is all about capitalizing on your strengths taking advantage of your competitor’s weaknesses and creating opportunities by evaluating internal and external environments in your industry or marketplace.