A SWOT Analysis is a useful technique for understanding your internal Strengths and Weaknesses, and for identifying both the external Opportunities open to you and the external Threats you face. This type of analysis is particularly powerful because, with a little thought, it can help you uncover opportunities that you are well-placed to exploit. Also, by understanding the weaknesses of yourself or your business, you can manage and eliminate threats that would otherwise catch you unaware.
By looking closely and honestly at yourself and your competitors using the SWOT framework, you can start to build a strategy that helps you distinguish yourself from your competitors, thus giving you an advantage.
Strengths (internal, positive factors)
Strengths describe the positive attributes, tangible and intangible, internal to your organization. They are within your control.
What do you do well?
What internal resources do you have? Think about the following:
– Positive attributes of people, such as knowledge, background, education, credentials, network, reputation, or skills.
– Tangible assets of the company, such as capital, credit, existing customers or distribution channels, patents, or technology.
What advantages do you have over your competition?
Do you have strong research and development capabilities? Manufacturing facilities?
What other positive aspects, internal to your business, add value or offer you a competitive advantage?
Weaknesses (internal, negative factors)
Weaknesses are aspects of your business that detract from the value you offer or place you at a competitive disadvantage. You need to enhance these areas in order to compete with your best competitor.
What factors that are within your control detract from your ability to obtain or maintain a competitive edge?
What areas need improvement to accomplish your objectives or compete with your strongest competitor?
What does your business lack (for example, expertise or access to skills or technology)?
Does your business have limited resources?
Is your business in a poor location?
Opportunities (external, positive factors)
Opportunities are external attractive factors that represent reasons your business is likely to prosper.
What opportunities exist in your market or the environment that you can benefit from?
Is the perception of your business positive?
Has there been recent market growth or have there been other changes in the market the create an opportunity?
Is the opportunity ongoing, or is there just a window for it? In other words, how critical is your timing?
Threats (external, negative factors)
Threats include external factors beyond your control that could place your strategy, or the business itself, at risk. You have no control over these, but you may benefit by having contingency plans to address them if they should occur.
Who are your existing or potential competitors?
What factors beyond your control could place your business at risk?
Are there challenges created by an unfavorable trend or development that may lead to deteriorating revenues or profits?
What situations might threaten your marketing efforts?
Has there been a significant change in supplier prices or the availability of raw materials?
What about shifts in consumer behavior, the economy, or government regulations that could reduce your sales?
Has a new product or technology been introduced that makes your products, equipment, or services obsolete?