Do you want to uncover the hidden gems and strategies of a company CIA style? If YES, here are 7 steps to conducting a thorough SWOT analysis on a company.
SWOT analysis is a strategic planning technique used to help a person or organization identify their Strengths, Weaknesses, Opportunities, and Threats relating to business competition or project planning.
SWOT analysis is used in an organization to determine how closely a business or company is aligned with its growth trajectories and the success benchmark it has set for itself; and it can also be used to ascertain how well a particular project is performing according to initial projections.
SWOT analysis can be applied to an entire company or organization, or to individual projects within a single isolated department. What makes SWOT analysis particularly powerful is that it can help you uncover opportunities that you are well-placed to exploit, but which you may not have knowledge of at that particular time. By understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares.
Conducting SWOT analysis for a business is just like carrying out regular health check-up on your business, be it new or old. In the diagnostics of those check-ups, you will be able to identify the positives and negatives your business faces at that very specific time.
In a typical SWOT analysis, strengths and weaknesses are concerned with internal areas of your business which you have control over, whereas opportunities and threats concerns outside forces that can either harm or benefit your business.
Advantages of Conducting SWOT Analysis for your Business
Conducting SWOT analysis for your business from time to time comes with a whole lot of advantages, and they include;
- Clarity: conducting SWOT analysis for your business would enable you have a crystal-clear picture about your business’ current position. It will enable you know whether you are in favour or have fallen out of favour with your competitors.
- Helps with the business plan: Laying out the strengths, weaknesses, opportunities and threats of your business will provide you the insight you need to create a suitable business plan.
- Helps drive business growth: conducting SWOT analysis of your business will not only give you the information necessary to evaluate your current business state, but will also help you to take measures to drive your business to its full potential.
- Makes useful data available for the business: SWOT analysis requires that quantitative and qualitative information from a number of sources be obtained and combined. Access to a range of data from multiple sources improves enterprise-level planning and policy-making, enhances decision-making, improves communication and helps to coordinate operations.
- Requires minimal cost: a SWOT analysis is quite easy to conduct because it requires neither technical skills nor training. In fact, a company can select a staff member to conduct the analysis rather than hire an external consultant thus saving the company money.
7 Steps to Conducting a Thorough SWOT Analysis on a Company
Conducting SWOT analysis on your company is in fact a very simple process despite the fact that it appears intimidating. This process just involves being able to identify your company’s strengths, weaknesses, opportunities and threats, and using them to draw conclusions on the state of heath of your company.
To make your analysis effective, you need to involve various members of your management team from finance, marketing, operations down to production. To conduct an effective SWOT analysis, you need to proceed the following way;
1. Review your company Strengths: the best place to start when conducting a SWOT analysis on your company is to review your company’s strengths. You do this by looking at those things you can control in the company or those things that play to your advantage.
You need to identify what your company does better than your competitors, such as the way you deliver services or the benefits your products offer. Look at the advantages your products or services offer as compared to your competitors’.
Evaluate the resources your company has access to such as an office large enough to house more employees or an experienced sales or management team. Your other strengths might include integrated software that helps you book appointments and fulfill orders or an effective marketing plan that converts prospects into paying customers.
Asking yourselves these questions would help point you towards your strengths if you are having problems pinpointing them.
- 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.
2. Bring out your Weaknesses: here is where you focus your attention of the perceived weaknesses of your company. You would need to be very sincere with yourself here because businesses tend to overlook their weaknesses, preferring to believe that they do not exist.
Your weaknesses may be the resources you lack, an ineffective production or marketing department, etc. Sometimes, a good look at your company’s financial statement would point you in the right direction. If you still struggle to find your weaknesses, you could ask yourselves the following questions;
- What needs to be improved in the company?
- What must you avoid to grow?
- What are people in your target market likely to see as weaknesses?
- What factors make you lose sales?
The key to identifying a company’s weaknesses is in being realistic, you must of necessity tell yourself the truth.
3. Outline your Opportunities: Here is where you now focus on opportunities that are available for your business to increase customer loyalty, improve cash flow or become more productive. You need to look at new markets that represent opportunities to find new customers, or to new and unharnessed segments of your market.
Review local, state and federal regulations to see how they affect your business in a positive way. If you are stomped for ideas, you can look at your strengths and ask yourself whether these strengths open up any opportunities, or you can look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
Asking yourself some of these questions would also prove quite useful in spotting your business’ opportunities.
- What good opportunities can you spot?
- What interesting trends are you aware of?
- Are they market modifications that are swaying in your favour?
Also, 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.
4. Evaluate your Threats: as a company, you are bound to have a few things threatening your existence and profitability. These threats may come from new trends in the marketplace that make your product or service less desirable, or from advances in technology that your company does not yet incorporate into its operations.
Competitors offering similar products or services represent another threat, especially if they compete with you directly. You can analyse these few questions to gain more insight into what your threats are.
- What obstacles do you face?
- What are your competitors doing?
- Are standards changing in your industry and you are not able to meet up?
- Is changing technology threatening your position?
- Do you have bad debt or cash-flow problems?
- Can any of your weaknesses seriously threaten your business?
5. Establish business analysis from the SWOT: when you are done listing out your strengths, weaknesses, opportunities and threats, you then have to display these lists side-by-side so you can have an overall picture of how your business is running and what issues you need to address.
You can then work out what issues are the most important and what can be dealt with later. Critically analyzing the SWOT can tell you where your business is getting it wrong or why your business has refused to break-even after all your efforts.
6. Develop a strategy to address issues in the SWOT: the main reason why a SWOT analysis was conducted in the first place was to diagnose things that are ailing your business. Once the SWOT has been outlined, it is now time to start addressing the issues that were laid bare in it.
In order to ensure that the SWOT analysis you conducted would benefit your business, you have to find effective ways of; using your strengths to take advantage of the opportunities identified; using your strengths to overcome the threats identified; finding out ways to overcome the identified weaknesses in order to take advantage of the opportunities; and finding out ways to minimize your weaknesses and overcome the identified threats.
Your ability to use your results to affect your business positively is how you would know that your SWOT analysis was successful.