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What is SWOT Analysis and How Can it Benefit My Business?
How should I use SWOT analysis in my business?
SWOT analysis should normally be a regular process; if you integrate it into your annual performance review, it will give you a clear picture of how your business has changed at regular intervals and whether you are heading in the right direction more generally.
The snapshot of a business provided by a SWOT analysis can also be a good tool when looking to raise finance for external investors, or for maximising the benefits before you hire a consultant to look over your business.
Broadly, a SWOT analysis should follow these steps:
- Decide who will be involved. Senior people within your company are obviously essential for an inside view, such as managing directors and heads of divisions. Customers and suppliers can provide analysis from outside; you can use surveys or questionnaires for an overview or decide to include them in the process itself. If it’s your first time running a SWOT analysis, it is likely you will benefit from the expertise of a dedicated consultant.
- Identify the issues. Once you have identified who will be involved, conduct a brainstorm of where they think the strengths, weaknesses, opportunities and threats are in your business; focusing especially on weaknesses and threats. Use the below checklists to guide areas for discussion.
- Work out the importance of the issues. Use information from your own or similar businesses to help you in this regard. For example, if you conducted a SWOT analysis last year that identified a particularly lucrative customer account as a strength, your business is obviously weakened in this regard if you have lost that customer. Focus especially onto what extent the strengths and weaknesses you have identified give your business a competitive advantage (or disadvantage).
- Draw up an action plan. Put what you have learned into practice by drawing up a clear, simple roadmap for how you plan to improve your business’ position. Encourage input from key people in your company for ideas and make sure the action plan contains concrete steps and timeframes for completing your objectives.
- Use your SWOT analysis to help you in key business decisions. An example would be using the SWOT analysis to identify whether a new product launch is in line with your strengths.