SWOT is a common model used to plan the goals of a business and the steps it takes to achieve them. Every business has internal and external factors that could either promote or limit its progress. The goal of every business owner is to identify each of these factors. They aim to make use of positive parameters, both internal and external, as driving forces to move the business forward and leverage it. This model helps business owners learn how to minimize damage and expect the negative parameters, both internal and external.
Every business, particularly small ones are recommended to run a SWOT analysis once in a while to ensure their strategy is working well, whether they are successfully promoting their business and bringing the expected results in.
The model helps minimize damage | Photo from Fotolia
Strengths are true to their name - they represent the strong internal factors of an organization, business or company. If for instance, the business is located in a central geographic location, then the business could approach a larger audience on a national scale rather than a local one. A business with nationwide branches is also a strength, as they can reach a wider and more diverse audience. Resources are also most definitely a benefit. Even if a business is small, it can still have a variety of strengths.
In order to identify its strengths, business owners must answer the following questions: What are the advantages of this business compared to its competitors? What do its customers want in order to be satisfied with the services provided? What resources does it have in a given moment?
Weaknesses, the exact opposite of strengths, are the internal factors preventing or holding back a business' progress and growth.
Weaknesses can be a lack of resources, personnel, guidance or employee education. For small businesses, an amateur marketing system is usually considered their weakness. To identify the weaknesses of a business, answer the following questions: What areas are outperformed by competitors? What factors were customers less pleased with? Every so often, it's recommended that you contact customers in order to receive reliable feedback. "After receiving reviews and comments from your customers, you'll be able to identify your weaknesses, improve them and make a change", says Kobi Cohen Mauritius
Opportunities are external situations which should be seized with both hands to make substantial progress. Inexperienced small business owners do not always know how to identify and seize these opportunities. These could be new markets, possibilities to merge and share, technological innovations that could upgrade the product manufactured or marketed by the business as well as troubles faced by competitors. In order to analyse the market you may need the assistance of a business or strategic consultant who specializes in this job.
Threats are external factors that could weaken the business or prevent its growth and progress. For example, say your business is a restaurant and another one serving similar food for a cheaper price opens across the street from you - this is considered a threat to the business. Other products introduced to the market that your business does not supply are also considered a threat. Therefore, it's important to always stay updated, be vigilant on current market trends and innovations in the field of business. Threats generally arise when there are new similar, competitive businesses in the market.
SWOT is a comprehensive analysis that should include all factors that influence the business' operations, both positively and negatively. Business owners must be greatly aware and be able to take notice in every detail in order for the analysis to be successful and help build a potential new strategy. SWOT analysis helps business owners have a quick reaction and response in building an alternative business plan in areas where habits must change. In such a dynamic, fast-moving world, business owners should be open to new changes and avoid being set in their own ways. "You'll always be that one step ahead in achieving your business objectives by incorporating SWOT analysis in your plans", concludes Kobi Cohen Mauritius.