(Strengths, Weaknesses, Opportunities and Threats)
Doing SWOT analysis is a principal reason for a successful business planning. The need to take the time to evaluate the business potential and map an adequate plan for the challenging future is crucial.
To survive a business, entice lenders and investors to contribute with no fear to risk their money and understand how you make a profit, master your industry, expand your market, satisfy your customers and pin your rivals.
SWOT is an in-depth examination of Internal key factors that takes a closer look at the organization Strengths and Weaknesses. And External Key factors that look at the market place in which the business operates in order to help identifying new areas, set prospects of business growth with adequate assessment of the threats and vulnerabilities due to changes and unexpected trends in the market place.
SWOT analysis is mainly conducted to help enable business to channel its focus into those areas that present the greatest opportunities and those competencies in which it is strongest.
The business plan must consider the SWOT to mitigate weaknesses and develop a strategy to overcome threats and show a realistic vision to avoid misleading and overestimation of the business value and potential.
To conduct a Strengths analysis, we need to answer some questions
- Do we have
- Proprietary product/service/technology?
- Superior location?
- Unique business model?
- Value –added services?
- Advantages over competitors?
- Specialized areas of considerable expertise?
- Recognition and good soundness?
To conduct Weaknesses analysis
- Aspects of operations that need improvement / re-engineer?
- Operations that generate problems/ mess / uncontrollable outcomes?
- Areas that suffer from lack of expertise?
- Problems arouse from location?
- Negative press releases received?
- Resources usage lack optimization?
To conduct Opportunities analysis we need to answer some questions
- Are there
- Any markets that are not being served with the products and/or services?
- Emerging niche / developing market segments within the industry?
- Any target market , sales prospects and industry trends of interest?
- Changes in technology that could be beneficial to the business?
- Any competitor(s) who left the marketplace?
- Any companies/business that can be taken over and fit to the business?
- Any companies/business with whom strategic alliance can be formed?
- Any opportunities in international markets?
- Investors / lenders who like to grow the business by contribution?
To conduct Threats analysis we need to answer some questions
- Are there
- Any competitors emerging?
- Any existing competitors gaining strength?
- Any prices of competitors going up or down that may shake the breakeven?
- Any new Products/services introduced to the marketplace by competitors?
- Any Challenges that are emerging within the industry?
- Any new government regulations / policies / constraints being enforced?
- Skills inventory will suffer from retirement of business experts with no replacement.