What does SWOT stand for?

Identify your Strengths and Weaknesses, Discover Opportunities and Eliminate Threats!

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” Like the quote suggests, to win the business war, you should be falling in the former category of warriors. But how? The answer is SWOT analysis!

The analysis part begins once you are done gathering the information about your business or project and ends with strategies and decisions based on the analysis of the SWOT information.

SWOT analysis, in other words, is a strategic planning tool that can reveal a wealth of information. It helps you identify your own strength and weaknesses, as well as any threats or opportunities that may exist in a particular business situation.

It is not only used as part of a marketing plan but also for general business strategizing. Moreover, it can also be used as an opening point for team discussions.

What does SWOT stand for?

You are probably familiar with what SWOT stands for:

Strengths

Weaknesses

Opportunities

Threats

But what do these elements actually mean? Let’s put the spotlight on each of the elements individually.

SWOT – Strength, weakness, Opportunity, Threat

What are the internal factors in SWOT analysis?

Internal factors in SWOT analysis are:

Strengths
Weaknesses

What are external Factors in SWOT analysis?

External factors in SWOT analysis are:

Opportunities
Threats

Strengths

Strengths are your internal traits and resources that help you get a successful outcome. While determining your strengths, you may consider the following questions:

What is it that you do better than your competitors?
Your unique skills?
Your company’s USP (Unique Selling Proposition)?
Factors that increase your sales?
What are you specialized in?

Apart from your internal perspective, also evaluate your strengths from an external perspective: customers and people in the market.

Having difficulty determining your strengths? Try jotting down a list of traits your business or organization have. Some of them can definitely be listed as strengths! Your human resources could also be considered as your strength: a great team of writers or strong leadership.

Weaknesses

Done identifying your strengths? Well, it’s time to shift your critique on your weaknesses now. Following are some questions to consider while identifying your weaknesses:

What’s holding your business back?
Areas of your business that need improvement?
What can you avoid?
Factors that decrease your sales?
What resources do you lack?
Which department needs more experienced or skilled resources?
What costs you more money and time?

Again, consider this from both perspectives: internal and external. Moreover, it is important to be realistic while determining your weaknesses and face the unpleasant truths with an audacity to turn your weaknesses into strengths!

Opportunities

For this element, evaluate the external state of affairs that will enable you to attain your objectives. Consider the following questions while examining your opportunities:

What can be used to improve your business?
How can technology improve the outcomes?
What are your current business goals?
What can you do more for your current clients or customers?
How can you reach a new target audience?
Do you need additional resources to enter a new target audience?
Can you spot any good opportunities?

Threats

These are the external factors that could risk the success or damage the performance of your business.

What are your competitors up to?
Hindrances that are you facing?
What are the strengths of your competitors?
Are your competitors doing something different than you?
What’s going on in your industry?
What is the current scenario of the economy?
Is a changing technology challenging you?
Do you have cash-flow issues?
Which of the weaknesses can actually damage your business?

What’s Next?

Done identifying all your S-W-O-T (Strengths, Weaknesses, Opportunities, Threats)? The next part is considered one of the most critical parts of your analysis, which is: Using the information you gathered to create new business strategies. For instance, you can:

Devise a plan for improving your strengths even more
Come up with solutions to build up your weaknesses
Create SMART objectives and goals for each identified opportunity
Construct a plan to decrease or eliminate the identified threats

According to Sarsby (2016), Matching and Converting technique should be applied while performing the analysis. Matching means connecting the opportunities and threats (external factors) to the Strength and weaknesses (internal factors).

Whereas, converting means transforming the damaging factor into a helpful one. For instance, converting your threats into opportunities and your weaknesses into strengths.

So, try to be more creative and look for more ways to combine the information you gathered from all four elements. For example, you may:

Try combining your opportunities with your strengths to create new marketing strategies
Evaluate your weaknesses and business opportunities to make a list of areas that need improvement
Explore ways to combine the identified threats and strengths to eliminate or reduce your threats by using your strengths
Create business strategies to avoid weaknesses as well as threats

If you have understood how to gather your SWOT information or data and know how to use it strategically, you are ready to advance your decision-making process and explore new opportunities.

Useful Tip:

To perform your SWOT analysis effectively, it is crucial to:

Keep it concise and simple
Be realistic
Eliminate bias as much as you can
Consider capabilities, resources, internal politics and challenges
Consider competitors, industry trends as well as industry dynamics

So you see, the end result of SWOT analysis is not just a grid or matrix but rather a brief report comprising SMART goals and activities that need to converse to your stakeholders.

In short, to win the business war, you must identify your weaknesses and threats and turn them into your strengths and opportunities. A regular SWOT analysis would not only help your business flourish but also reduce or eliminate the factors causing hindrance in your way to success.