We hear a lot about the term SWOT in businesses and corporate circles. SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. Analysis of SWOT helps a business owner in evaluating where he/she stands in comparison to their competitors and what needs to be done to get ahead keeping in view these four parameters. SWOT analysis helps in tackling challenges that lie ahead so as to ensure smooth growth and success for the business.
Identifying the issues that affect your business is always good as you can take corrective action and improve the business accordingly. It is like taking a close look at a product or service in order to make it more effective and useful for the customers. The advantage of SWOT is that it can be done by anyone who understands the nature of their business. It is not necessary to hire the services of a paid consultant to carry out a SWOT analysis.
What can a SWOT analysis do for your business?
- Develops a better understanding of your business
- Identifies threats to allow you to take corrective action for their deterrence
- You come to know the weaknesses in your business
- You learn about inherent advantages to surge ahead of your competitors
- You can spot opportunities and take advantage
- You can develop business goals and strategies to reach them
Every business has certain advantages. SWOT analysis tells you about these advantages that can be built upon to gain a competitive edge over your competitors. Most businesses don’t know about their strengths properly. If you can identify and work upon these strengths, you can easily improve and surge past your competitors.
Like strengths, there are always some weaknesses in a business that put you at a disadvantage in front of your competitors. A SWOT analysis helps in pointing out these weaknesses so that you can take corrective actions before they get too complicated. Ignoring or overlooking the weaknesses can cost your business dearly in the long run.
There are always opportunities in a business that can be taken advantage of. Often, opportunities are not clearly identifiable. Opportunities could lay behind the veil of market changes or consumer behaviour to remain hidden from the eyes of the business owner. A SWOT analysis can pick up these opportunities and highlight them so that you can use them to your advantage.
Finally, there are always threats in front of a business. These threats work as roadblocks that have the capability to slow down or halt business activities. A SWOT analysis identifies and highlights these threats in front of the business owner in time, which can help them take corrective action to either avoid them altogether or to minimize their adverse impact upon the business.
SWOT analysis is a must-do exercise for a business owner. It gives them insights into the strengths and weaknesses of their business. They will come to know about the opportunities that lie ahead as well as threats that can adversely impact his business. In a competitive market, it is this SWOT analysis that makes it possible to chalk out strategies and take decisions for the growth and success of the business.