Business analysts must regularly assess different things such as market sentiment, trending products, and other business processes to manage a profitable and efficient business.
A business analyst can examine a company in various ways, but a sure effective method is to conduct a SWOT analysis.
It is a technique for finding out a business’s strengths, weaknesses, opportunities, and threats. It assists businesses to overcome obstacles and decide which fresh opportunities to pursue.
Albert Humphrey of the Stanford Research institute devised SWOT analysis in the 60s to find out why corporate plans fail. Since its debut, it has been one of the most important tools for corporate growth.
If you spend time conducting a SWOT analysis, you need a strong strategy for prioritizing tasks you need to perform to grow your business.
This analysis will compel you to look at your company from new angles. You will assess your strengths and limitations and how to use them to exploit market opportunities and expel threats.
For it to be effective, the founders and leaders of the company must be deeply involved in a SWOT analysis. Do not delegate this role to somebody else.
But company executives can not do it alone. For optimum results, convene a diverse group of people with diverse viewpoints about the company. Individuals from all departments should be selected. Everyone should have a chance to voice their opinions.
When performing a SWOT analysis, innovative companies seek input from customers to add their distinctive voice to the mix.
You can still undertake a SWOT analysis if you are starting or running your own business. Take the help of business-savvy friends, your accountant, or even vendors and suppliers. The trick is to have opposing views.
Small and medium-sized businesses can use this process to examine their current conditions and plan for the future. Remember things change constantly, so reassess your plan every six to twelve months.
It should be a part of business strategy for startups as well.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It comprises both internal and external elements that are vital to a company’s success. Here is a quick summary of it.
Strength refers to an organization’s traits needed for projects and business success. Any resource or capability used to gain a competitive edge.
Weaknesses are factors that can hinder a project’s success. To beat your opponents, you must improve these flaws.
Opportunities for a business are external factors that may help achieve a project’s aims. They may be in the shape of market technology or other advances. For a company to be successful, you must be able to detect and seize these possibilities.
Threats include anything that may jeopardize a company’s success or growth. It is critical to foresee threats and address them before they worsen. Some business threats include:
A value line SWOT analysis of the Coca-Cola company in 2015 identified strengths such as its globally recognized brand name, extensive distribution network, and expanding the market potential.
Foreign currency fluctuations, increased public interest in ‘healthy’ beverages, and competition from healthy beverage producers were all mentioned as weaknesses and risks.
Value Line’s SWOT analysis led to some serious concerns about the company’s strategy. But it also noted that the company would remain a top-tier beverage provider that provides conservative investors with a steady source of income and a bit of capital gain exposure.
Five years later, the Value Line Swot Analysis proved to be effective, as Coca-Cola is still the world’s sixth most valuable brand. Its share value has increased more than 60% in the last five years since the analysis.
Another great example is Home Depot.
Home Depot conducted a SWOT analysis. They compiled a list of pros and cons and external threats for existing market position and growth strategy.
Its strengths included high-quality customer service, excellent brand recognition, and positive relationships with suppliers. Nevertheless, its limitations included a constrained supply chain, interdependence on the US market, and a replicable business model.
Home Depot’s risks were closely tied to its weaknesses – the presence of close competitors, viable substitutes, and the state of the US market. Based on the findings of this study and other analyses.
It was determined that growing its supply chain and global footprint would be critical to its future growth.
A SWOT analysis is discovering and examining a company’s strengths, opportunities, weaknesses, and threats.
It is a good idea to make a list of questions to answer for each element first. The questions will help you complete your SWOT and make a balanced list.
The SWOT framework can be written, as a list, as plain text, or as a four-cell table, with quadrants dedicated to each aspect. Opportunities and threats are listed after the strengths and weaknesses.
A SWOT analysis can help plan business strategy meetings. Defining opportunities and threats and exploring ideas are potent when everyone in the room is involved.
As a result of group participation, your SWOT analysis may evolve throughout the session to include variables you were unaware of.
Companies can use SWOT analysis for overall company strategy or specialized areas like marketing production and sales.
Before committing to a plan, you should examine how it will affect the segments below. A segment-specific SWOT can also feed into an overall SWOT analysis.
SWOT analysis has limitations as a planning tool. However, it should not be used as a sole method of business planning. When used with other planning techniques, it can give optimal results and yield higher value.
Klizo Solutions was founded by Joseph Ricard, a serial entrepreneur from America who has spent over ten years working in India, developing innovative tech solutions, building good teams, and admirable processes. And today, he has a team of over 50 super-talented people with him and various high-level technologies developed in multiple frameworks to his credit.