What is SWOT analysis

SWOT Analysis is the exact yardstick that a business needs to hold to make informed decisions. What Is SWOT Analysis? The success of a Business is dependent on factors about the company as well as out in the Market. SWOT analysis is one of the most commonly used terms in Business planning. SWOT analysis is a strategy tool that assists in understanding the scope of a business and planning accordingly. SWOT is an acronym for Strengths (S), Weaknesses ( W), Opportunities ( O ) and Threats (T). A proper understanding of all four factors allows being at the face with the reality of the Business’s current position and allows better utilisation of the available resources. Performing an assessment of the positives and the negatives that a business has to offer helps to prepare and overcome the lackings and prevents a probable failure from happening. Moreover, SWOT analysis also helps a business or an individual to identify what is unique to a business and then invest well in that uniqueness to the maximum interest of the business. How To Do SWOT Analysis? SWOT analysis, as a technique,  is often used by startups or beginners to get started with a venture. It is the immediate step they take after an idea pops up. Established and profitable businesses to use SWOT analysis as a formal tool to help expand themselves and to strengthen their hold of the market.

SWOT analysis can be performed by a team of individuals belonging to different levels and ranges intercommunicating ideas that present a real ‘report card’ of the business’s recent performance. These ideas can be broadly contained within sections of Strengths, Weaknesses, Opportunities and Threats. The playwork of SWOT Analysis is a 2×2 grid structure where the four square boxes represent the four aspects of SWOT. The aspects of SWOT are categorised into    Internal factors include Strengths and Weaknesses as these are aspects of the company. The company has some control over these factors and can change them to enhance performance. External factors include Opportunities and Threats which are aspects of the Market and are beyond the control of the company. They cannot be changed and a business can only adjust itself according to them. We need to look into all 4 aspects of the SWOT Table in greater detail :  Strengths (S) Strengths are internal factors of a business, referring to the advantages and positive attributes that a company possesses to give itself an upper hand in the Market. These are critical success factors and the strengths of a company are related directly to the enhancement of performance of a business in the market. These factors are within the control of the business and are utilised effectively. Strengths can be identified as everything that a company does better than its competitors. Strengths include factors like : The good reputation of the company in the Market. The successful business processes held by the business  Education, knowledge and skill of the team  Physical assets and capital possessed such as technology, cash etc  Weaknesses (W) The shortcomings of a company or aspects that could either be improved or avoided by the company in its running are termed as Weaknesses. Like strengths, weaknesses to are internal aspects that a company has control over and can overcome.  These are aspects for which a business receives complaints or faces criticism over. A company can track its weaknesses through honest and realistic analysis of itself.  Weaknesses include : Business processes that need improvement  Gaps and fissures within the team The advantages that the competitors have over the company  Assets that the business lacks or are not sufficient with. Opportunities (O) Opportunities are factors external to the company, that have the potential to contribute to the success of the business if claimed wisely. A company should possess the ability to spot these opportunities and put them into best use.   It is very much these ability to seize opportunities that provide an edge to a company over its rivals. Opportunities are available to services that a company is using or the market that it is feeding. Possible opportunities that a business should look out for are :  Growing market trends  How customers perceive  the business  Regulations that can advantage the company  Upcoming events  Threats (T) If the market provides opportunities that help the business grow, it also imposes threats that are likely to slow down or hamper the growth of a company. These are external hurdles to a company’s growth and are problems that a company must expect to face and prepare to tackle.

The opportunities and strengths of the competitors add to the threats that a business has to face. Hence, a business should be constantly aware of its competitor’s progress and their running, to minimise the risk, threats have to offer.  A company has to keep up with the growing trends of the market to hold the lead that it has over its rivals. Threats to a company’s success include :  The entry of new competitors in the market Customers’ changing behaviour for the company  Not being able to adapt to technological advancements Inability to meet supplier’s price demands  It is very important to understand that the content of the aspects may vary between different divisions of the same business. For instance, The legacy and reputation of a company is a potential strength, to one division but may be perceived as outdated to another division and hence be termed as a weakness. Therefore, SWOT Analysis should be performed on different levels and fractions of a business. How To Use SWOT Analysis? Once the SWOT Analysis is ready, a company comes at the face with everything that it is furnished with and all that it needs to work on. But the next step after preparation of the Analysis is, not to just rush into action, but to again carry a proper derivation of the Analysis. It is important to check whether the positives outweigh the negatives. Further, one needs to check possible relations between different aspects and see if the strengths have the potential to open up more opportunities.