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If you don't have the time or inclination to read this blog, click on the red arrow below to listen to Julie reading it. A sort of business storytime, if you like.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. A SWOT analysis is a valuable thinking tool that can help you focus on the key issues for your business.
Why do you need to SWOT?
A SWOT analysis is used in many ways but, in a marketing context, it focuses on products/services and customers/ markets. It analyses internal and external factors:
- the internal strengths of the business
- the internal weaknesses of the business
- the external opportunities open to the business
- the external threats to the business.
It is useful to do a SWOT when you’re starting up, and again at least once a year as part of your planning.
It is a good idea to do a SWOT for each of your main competitors, too.
What do you need before your SWOT?
Quite a bit!
- First of all, collect as much information as you can, both internal and external (see pages 34—37 of our Essential Business Guide for more help with the types of information you could use, plus we give more ideas in the downloadable pdf, see below). Note: If your type of record-keeping makes this difficult to do, now is your chance to change the way you hold information so that your records give you ‘marketing-friendly’ information in future.
- Now add information about the wider market, your growth rate and that of your main competitors, and whatever else is relevant to your particular market.
- Put this into the context of the wider environment: are you going to be affected by government legislation, economic changes, social factors or technological advances?
- Involve as many people as you can in your analysis, both within your business and outside it (an external consultant might take a much more objective view than you can, for example).
How do you carry out a SWOT?
- Using all the information and analysis as a starting point, work out the Strengths, Weaknesses, Opportunities and Threats for your business with a group whose opinions you trust and value.
- Try not to be critical at this stage, just note down all the ideas and views, and analyse them later.
- To bring out the best ideas, make everyone feel comfortable about expressing their honest views. Do not criticise anything, however far-fetched.
A SWOT can help you see clearly which next steps you have to take, and in which areas. It isn’t something you stick on the wall and admire, you have to translate it into action. If you don’t, you can rest assured that your competitors will be noting your lack of action as a window of opportunity on a SWOT all of their own.
In my next blog, I'm going to be covering practical ideas on turning your SWOT into an action plan for your business. You are also welcome to download a pdf which shows you how to do a SWOT and gives you sample SWOT analysis and competitor analysis sheets that you can use for your own business (you can type into the sheet and save your work, you'll need Acrobat Reader to be able to do that).
Finally, here's another example of a completed SWOT (download it if you can't read it properly).
