What is SWOT Analysis and how to do it effectively in 2022?

Every Business has some strengths & some weaknesses. If the business wants to grow, it needs to understand & leverage them for future growth.

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If you too want to understand the strength & weaknesses of your business, a SWOT analysis can come to your rescue.

In this piece of information, I have discussed what is SWOT analysis is and How to do a SWOT analysis of a company.

I hope this guide will help you better understand your business & propel its growth.

Let’s begin.

What is the SWOT analysis?

SWOT (Strength, Weakness, Opportunities & Threats) analysis is a structured framework designed to analyze & evaluate these four aspects of any organization. SWOT analysis is the tool that gives you an insight into what your business is doing right currently & how you can ensure steady growth. It also covers your business’s weaknesses & threats that your competitors can leverage & put you in a precarious position.

SWOT analysis does this by analyzing multiple in-house & external factors that impact your business directly or indirectly. This means there will be some factors that you can control & some you cannot. But having an insight into them helps you better prepare yourself for any impending crises.

In short, SWOT analysis is a data-driven, realistic & holistic view of your business’s strengths & weaknesses. Every organization needs to perform this analysis with precision by avoiding any preconceived beliefs to get a better view.

You might feel that SWOT analysis is fundamental & simple, but deployed efficiently, it can transform the way you operate your business, leading to sure-shot success. Let’s say you have a clear idea about your business’s strength & you are leaning too much on it to succeed.

But until & unless you know your weaknesses & threats to your business, there is no way you can understand the efficacy of your strength.

So performing a precise SWOT analysis is rather mandatory than optional for a business that wants to survive in this fiercely competitive world.

After understanding SWOT analysis, it’s time to understand How to do a SWOT analysis of a company.

How to do a SWOT analysis?

SWOT analysis is a data-driven & fact-based look into your business’s performance, risks, potential & competition. So it’s essential that you must have factual data at your hand.

It’s possible that your understanding of your business might be partial. So instead of relying on your input entirely, gather a team from each level of your business & gather information.

As sown below, create a square block that’s divided into four quadrants, viz. Strength, Weakness, and Opportunities & Threats. You can also create a list, but his cubical structure gives you a better view of the whole scenario & makes the analysis easy.

• Strength
• Weakness
• Opportunities
• Threats

Now let’s look at these four areas in detail & a questionnaire to collect data.

Strength

Strength is something that your organization excels at & beats your peers. It can also be something that helps you stand out from the rest. So go up & down into your business & collect information about what it does best. This is the most crucial part of the analysis.

It can be anything like a Powerful Brand, a strong Balance sheet, access to certain materials, access to innovative technology, a strong consumer base, or dedicated & motivated staff.

Here are a few questions you can ask:

1. What your organization does better than others can’t?
2. What resources can you tap into but your peers can’t?
3. What is your Business’s USP (Unique Selling Point)?
4. What makes you think consumers will choose you over your competitor?
5. Make sure you get unbiased answers to these questions for better insight.

Weakness

Weaknesses are the factors that prevent an organization from performing at its peak level. So when you are looking for the weaknesses, analyze your business model, employees, existing systems & methods. These are the areas where your business needs improvement.

Here are a few questions you can ask:

1. What weakness does a consumer see in your organization that you can’t?
2. Why & how are you lacking behind your peers?
3. What makes your consumer dissatisfied & unhappy?
4. What process do you think needs improvement?

Opportunities

Opportunities are some favorable external factors that you can leverage for your business growth. These factors can be anything like advancement in the technology you use, government policies that can positively impact your business, or increased demands. As these are external factors, you need a keen eye to identify & leverage them.

These opportunities need not be significant. Grabbing even a small opportunity can transform your business as you have never imagined.

Here are a few questions you can ask:

1. How is technology changing your business?
2. How your customers’ needs are transforming?
3. Are there any new & favorable Government policies in place?
4. Is there an opening for you in the new market?

Threats

Threats are potential factors that can impact your business adversely. These factors can either be internal or external. It’s critical to identify these threats in advance. 7 neutralize them before they can severely damage your business.

Think about obstacles that can prevent your sales & ultimately impact your business growth. E.g., shortage of workforce, current technology becoming obsolete, weather conditions, economic situations, & changes in consumer demands.

Here is a list of a few questions you can ask:

1. Is your customer moving away from your product?
2. Is the new technology making your product obsolete?
3. Is your sales growth below the industry standards?
4. Is there a new competition in the market?

Check out some Swot Analysis examples here.

Final thoughts

SWOT analysis is a simple yet highly effective way to drive your business’s future growth. You can utilize SWOT analysis to identify your organization’s core strengths & leverage them optimally.

Similarly, you can identify weaknesses, opportunities & threats in advance & can tackle them before they derail your business. In short, SWOT analysis has a lot of potential to help your business grow.

But it’s important to note here that the SWOT analysis should not be used alone. You need other business planning techniques, too, to support the SWOT analysis.

I hope this guide on SWOT analysis will be helpful in future-proofing your business. Happy to hear your thoughts on social media, don’t forget to tag us along with your valuable feedback.

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