There is a common thread among businesses. Do you know what it is?
They all want a competitive edge. By using SWOT analysis, you can get that edge.
When you do a SWOT analysis, you will see your competitive strengths and how to better use them. Also, you will be aware of the areas that need improving to elevate your competitiveness
What is a SWOT analysis
A SWOT analysis is a data-based tool that assesses a company’s competitive position. It looks at the company’s Strengths, Weaknesses, Opportunities, and Threats. Hence, the acronym SWOT.
With a SWOT analysis, you will know your…
· Strengths and if you are using them to their full potential.
· Weaknesses that need to be remedied.
· Opportunities to capitalize on.
· Threats to prepare for.
Now we will look at the SWOT analysis framework. Then the purpose, and when to use a SWOT. Followed by, how to do a SWOT analysis and how to use a SWOT to improve your competitive edge.
The framework of a SWOT analysis
A SWOT analyzes the internal and external conditions of a company. The internal factors consist of your company’s strengths and weaknesses. The company has direct influence over these conditions. Such as company strategies, marketing, and deliverables.
The framework’s externals are opportunities and threats the company may face. External factors are the things that could affect the health of your company. For example, the political environment, the economy, or your competition.
You can also look at your SWOT from a positive and negative perspective. The positives are your strengths and opportunities. The negatives are your weaknesses and threats.
What is the purpose of a SWOT analysis?
The main purpose of a SWOT analysis is to have a data-based perspective of your company’s competitive position. Knowing your advantages and disadvantages will help your business decisions by using objective data
With the information you get from the SWOT, you will be able to capitalize on your positives and remedy the negatives of the company.
When to use a SWOT analysis
The times to use a SWOT analysis are when you need to know your competitive position, determine the direction of the company, or are considering a new venture.
The most crucial time to do a SWOT analysis is when you are considering starting a business or a new project. The data from the analysis will help you decide on the viability and assess the risks and rewards.
You can also apply this easy-to-use tool to other aspects of your business. For example, your content marketing strategy or evaluating a specific department within the company.
A SWOT analysis is a powerful tool to use for advancing your company’s growth and limiting the risks.
Question to ask when doing a SWOT analysis
You will have confidence in your business decisions because the information from your SWOT analysis will be based on objective data. Using this powerful tool gives you insight into the best path to take to grow your business.
Before we look at how to do a SWOT analysis, here are some questions to get you started.
- What skills and capabilities do we have that are assets?
- What does the market, including customers, say our strengths are?
- What do we do better than our competitors?
- What advantages does our competition have?
- What are the dominant complaints from customers?
- What does our competitor do better than us?
- What is trending in our market?
- Is our competition suffering losses?
- What available technologies are there that we can use to improve operations?
- Who are our competitors?
- Are there any new government regulations to be aware of?
- Are there any global conditions or developments that have the potential to disrupt business?
Although the above questions will get you started, there will be more questions to answer. They will depend on the objective of the SWOT analysis. Now, let us dive into doing a SWOT to reveal your competitive position.
How to do a SWOT analysis
When you do a SWOT analysis, it is essential to be objective, realistic, and specific.
To start your SWOT analysis, the first thing you need to do is to determine the purpose of the analysis. Is the purpose to improve customer relations? Is it to figure out your marketing strategy? Or do you need to know your current competitive position?
When your purpose is determined, the next step is to put your team together. Often, a SWOT team will consist of CEOs, board members, and department managers. The idea is to have the key people of the company involved.
The next step is to research the data as it pertains to the objective, after you have your SWOT team in place, here are sources of data for you to consider using.
SWOT analysis resources
The next step is to lay out your SWOT analysis. It will be easier to see the whole SWOT analysis at one time when it is formatted on one sheet of paper. It will also be easier to fill out. Below is a SWOT analysis template for you to use.
The next step is to have your team examine the data and write down the findings. Write down all your strengths, weaknesses, opportunities, and threat as they appear. This is your competitive position.
A word of caution: be careful you do not confuse weaknesses with opportunities. To avoid confusion, remember weaknesses are the internal thing that directly influences the company. Opportunities, on the other hand, present themselves with conditions developed from outside sources.
Also, when evaluating the externals of the SWOT analysis, your opportunities and threats, it helps to approach them with a concentric view—starting with the outer circle being global conditions. The next inner circle is industry developments, the next smaller circle is market conditions. And the center circle is consumer trends.
Now that you have your SWOT filled out and know your competitive position, you can plan and prioritize your goals.
Here are four questions to answer when reviewing your SWOT analysis.
- S– are we using our strengths to their full potential?
- W- What is the remedy for our weaknesses?
- O– Which opportunities should we pursue?
- T– How can we negate or mitigate current and future threats?
Once you have done this step, you have completed your SWOT analysis.
Let us review the 7 steps of doing a SWOT analysis.
- Determine the objective
- Assemble your SWOT team.
- Gather and research data.
- Layout a SWOT template
- Fill in the SWOT framework.
- Evaluate and write your conclusions.
- Use the SWOT analysis to plan your goals to improve your competitive edge.
By using the SWOT analysis framework, you will know your competitive position. You will also be able to supercharge your competitive edge. Just think of all the areas you will be able to reduce your risks and losses and increase your gains with a SWOT analysis.
I hope I encouraged you to take a fresh look at your company’s competitive position and strengthen your competitive edge.
The author: Sam Vigil is a content marketing writer and copywriter.
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