SWOT Analysis: What Is It and Why Is It Important?
SWOT analysis is a strategic planning and strategic management approach that may assist a person or organization in identifying strengths, weaknesses, opportunities, and threats in commercial competitiveness or project planning.
According to Facebook data from December 2020, about one-third (31%) of small companies in the United States are presently closed.
This was mostly due to the regulations in place, which harmed many small enterprises.
Whether you’re operational or not, you’ve probably learned that you need to identify locations…
…where you may strengthen your positioning and preparation for new and evolving realities, trends, and a client wants.
A SWOT Analysis is one of the finest approaches to find these situations.
Let’s get started!
Today, we’ll teach you how to do a SWOT Analysis, why it’s important, and what you can do with the results.
To efficiently advertise your company, develop your goods, strengthen customer connections, and retain top people…
…you must understand what works and what does not for your company and its employees.
In this post, we’ll look at:
What is a SWOT analysis and why do we utilize them?
Step-by-step instructions for doing a SWOT analysis
Questions to ask yourself if you become stopped during your analysis.
What to do when you’ve finished the analysis, including creating and prioritizing your worklist
Before we begin, a disclaimer:
What Exactly Is A SWOT Analysis?
A unforgettable brand identity
SWOT is an acronym for:
- Strengths
- Weaknesses
- Opportunities
- Threats
It is an evaluation tool that may help you find areas where your company excels and areas where it needs to develop.
What Is the Purpose of a SWOT Analysis?
As previously said, a SWOT analysis is utilized to determine where a firm excels and where there is space for progress.
This is often used to examine the situation before developing a new growth or marketing plan.
A SWOT analysis should be performed every 6 months to a year.
And whenever there is a major change on the horizon, such as when customers are suddenly unable to visit your shop.
If you’re doing it correctly, each time you’ll have fresh breakdowns and a new priority list to work on until the next SWOT holiday.
Is it possible to make it a thing?
Every company gets a day to focus exclusively on their SWOT analysis?
Who Should Participate in the SWOT Analysis?
No SWOT analysis, no matter how sophisticated, will be beneficial if there is no leadership in place to implement the essential adjustments.
Or, at the very least, develop a strategy to implement the necessary modifications.
So, before you begin, you’ll need to gain approval from the leadership team.
This, however, should not be a top-down exercise.
Get feedback from your customer care team, marketing, product development, product fulfillment/shipping, and Human Resources.
Make certain that each department is represented, but don’t limit yourself to managers or department heads.
You want to hear from those who are “in the weeds,” so to speak, who are intimately familiar with the day-to-day procedures and realities.
Steps for Conducting a SWOT Analysis
We’ll go through what to put in each quadrant and how to format everything.
Then, to aid you if you get stuck, we’ll guide you through each area and offer you some questions to ask yourself and your team.
Because a SWOT analysis may be overwhelming and complicated, we recommend categorizing it and focusing on one at a time.
Step 1: Determine your SWOT objective.
Before you begin your SWOT analysis, you must first set a goal or have a question to answer.
You must do this to keep your analysis focused.
It’s easy to become lost in a rabbit hole of every possible strength, weakness, opportunity, and threat.
You may quickly find yourself with a slew of unconnected thoughts (like marketing, creating new products, expanding services, etc).
We prefer to formulate our goal as a question so that if we get off course, one of us can ask this question and bring us back on track.
Here are a few examples of questions:
Should we add [new service] to our list of offerings?
How can we strengthen our digital marketing strategy and efforts?
What steps can we take to increase client retention?
We’ve discovered that beginning with the purpose or driving issue helps to concentrate efforts and discussions from the outset…
…as well as ensuring that everyone is working toward the same goal.
A SWOT with no purpose will rapidly devolve into chaos, so avoid them wherever feasible.
After you’ve determined your goal or question, it’s time to collect data, investigate your rivals, and solicit feedback.
Step 2: Collect data, investigate rivals, and get feedback.
A SWOT analysis cannot be performed in a vacuum.
You can attempt, but you’re unlikely to go very far because you’re simply depending on your own opinions and understanding.
Obtaining feedback from others is critical, as is obtaining real data so that your analysis is founded on facts and measurables rather than fantasies and dreams.
Step 2 contains three steps, as the title suggests:
Collect data, research competitors, and solicit feedback.
Let’s take a look at each one separately.
1. Collect Information
This is precisely as it sounds.
You’ll collect hard numbers (or as near to them as possible) for the aim of inquiry.
If you want to increase your sales, start by gathering data for:
How many sales do you now make, how much those sales cost you, what is the average order value for those sales, and how do you make those sales? (marketing channels, sales team),
2. Investigate Your Competitors
What do your rivals excel at?
What do customers like about them?
How does their online presence look?
How did they find the purchase and shipping process?
You’ll need this information to determine what you do better than your competition and what you do worse than them.
3. Request Feedback
Even if you are the owner or have worked in the field for some time…
…you don’t know everything about your company or the client’s journey.
That is why we seek out the perspectives and experiences of individuals both within and outside of the firm.
When we solicit feedback, we prefer to accomplish a couple of things:
We email our queries ahead of time before meeting with team members.
We’ve discovered that asking questions tailored to the individual’s department or job works best.
We also ask team members to describe their responses as one-sentence bullet points.
We aim to keep them to two or three bullet points per question.
Some people function better when they have more time to think about the issue and consider their response.
We’ve discovered that giving people time results in better, more fully developed responses and ideas than putting them on the spot at a meeting.
We meet with team members individually rather than in groups.
Some people may assemble everyone and do a one- to a two-hour brainstorming session to get ideas out there while also prioritizing them.
We’ve sat in on a couple of these in-person group sessions, and we don’t believe they’re that effective.
First, some employees may be hesitant to speak up if they believe their views will be interpreted poorly by management.
It’s also simple for more vocal employees to dominate the discourse, which means that not all ideas will be heard.
Second, we’ve seen far too many of these meetings deteriorate into conversations about operations or digital marketing campaigns, or check-ins.
Step 3: Make a list of your company’s strengths and weaknesses, opportunities, and dangers.
Now we’re getting to the parts that come to mind while performing a SWOT analysis.
We’ll spend most of our time here discussing ideas and identifying difficulties and potential solutions.
Let’s go over what you’ll include in each part, as well as some questions you can ask yourself or your team if you get stuck.
Weaknesses
This quadrant is for stuff you’re not very good at.
Take an honest look at this and truly listen to your employees’ and customers’ criticism without taking it personally.
If you’re having trouble coming up with vulnerabilities, consider the following:
What is the most common negative feedback we hear from customers?
Is it that prevents prospects from becoming customers?
What is causing internal delays in our processes?
What are we doing inefficiently?
Is there a better way to go about this?
What are the resources, knowledge, or abilities that we lack?
Opportunities
This quadrant represents your growth opportunities.
You should concentrate on what you could accomplish if you just had one or two alternative scenarios.
So, don’t get too far up in the air.
That’s not to suggest you shouldn’t share your thoughts.
However, this implies that you should concentrate on building those that can be completed within a 6-month to 1-year timeframe.
Those enormous, aspirational ambitions may be included in your long-term growth strategy.
Separately from your SWOT analysis, work on this.
If you’re having trouble coming up with opportunities, consider the following:
Are there any present or future trends that we can relate to our company or product?
Is there a skill set or individual that we are missing?
Could we design a job and employ someone to fill it and become a member of the team?
Who can we rally behind?
So, what can we do to help them?
Conclusion
We hope this helped to clarify what a SWOT analysis is, why you need one, and how to do one.
You’ll become better at these as you go, so don’t worry too much about it.
Use as much data as possible, and if you don’t have any hard data, start gathering it now so you’ll have it ready for the next time.
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