What is SWOT Analysis?

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As a business owner, when you start making plans for the coming year, it’s important to step back and take a long, honest look at the state of your business. A little self-inventory can be critical for identifying vulnerabilities that need to be addressed, opportunities that need to be exploited, and strengths begging to be reinforced.

There are a number of business tools that make it possible to conduct a thorough, objective analysis, and one of the most common is the SWOT grid. If you’ve never done a SWOT analysis for your business, now’s the perfect time to try it out.

SWOT analysis at a glance

When you conduct a SWOT analysis, you make a critical appraisal of your business, sizing it up in four different categories:

Strengths — What are some of the things your business does well? — What are some of the qualities that distinguish you from the competition? — What are some of your most valuable skill sets, knowledge bases or physical assets?

Weaknesses — What are some areas where your company is lacking? — What are the areas in which your competition outshines you? — Are there any resources that you need, but don’t have access to?

Opportunities — Is there any part of your industry or niche where the competition is sparse? — Are there any underserved markets into which your services provide an opening? — Are there any trends or emerging needs for your services?

Threats — Do you have any new or emerging competitors? — Have customer attitudes turned against your company? — Are there external/market factors that are reducing demand for your services?

Think of these four categories as a prism through which to view your business, allowing you to get a full sense of where it stands and where it might go in the future.

Tips for conducting a SWOT analysis

As you consider using this tool to surmise the state of your business, here are a few best practices to keep in mind:

● Don’t analyze alone. You’ll probably get a much fuller picture and arrive at conclusions you wouldn’t have come to on your own if you collaborate with team members or a trusted business mentor.

● Weigh external and internal factors. In each category, you’ll want to think about factors within and outside of the business. For example, strengths may include new service offerings you’ve developed or new team members you’ve trained, but they may also include market forces that have increased the need for your services.

● Look at data points. There’s plenty of evidence you can assemble to help you weigh strengths and weaknesses, such as customer reviews posted to social media, common questions and complaints, etc.

● Do competitive intelligence. To get a full sense of opportunities and threats, you’ll need to take stock of the competition. A little online research goes a long way, so pay attention to services they offer that you don’t, and to the points emphasized in their customer reviews.

The bottom line: Conducting a SWOT analysis helps you know your business and plan for a brighter future. Next month, we’ll dig deeper into some of the specifics of strengths and weaknesses identification, providing further guidance into using the SWOT approach to make your business better than ever.


About the Author

Amanda E. Clark is the president and editor-in-chief of Grammar Chic, a full-service professional writing company. She is a published ghostwriter and editor, and she's currently under contract with literary agencies in Malibu, California and Dublin. Since founding Grammar Chic in 2008, Clark, along with her team of skilled professional writers, has offered expertise to clients in the creative, business and academic fields. The company accepts a wide range of projects; often engages in content and social media marketing; and drafts resumes, press releases, web content, marketing materials and ghostwritten creative pieces. Contact Clark at www.grammarchic.net.



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