SWOT analysis is a powerful and highly-effective technique to evaluate the competitive position of your company or project. This analytical technique helps identify and define key characteristics of your organization, including strengths, weaknesses, opportunities, and threats.
SWOT investigation can be applied to an entire organization or an individual project, regardless of the industry. It is primarily used at the organization level to determine how closely the business is aligned with its success benchmarks.
You can easily conduct the SWOT investigation of your organization or product by choosing a pre-built SWOT analysis template available online.
Elements of SWOT analysis
To understand how to perform a perfect SWOT analysis that yields useful results, you must understand what each of the SWOT elements means.
Strength is an internal factor that addresses things the company is skilled in. This could be anything intangible, like your brand’s attributes or tangible, such as your impeccable product engineering team. SWOT analysis can be used by all important roles in your inbound marketing team structure.
Recognizing your weaknesses involves critical self-awareness and understanding what’s holding you back. It can be any organizational challenges, like a lack of skilled people or budgetary issues.
Recognize the existing and potential opportunities within your organization and work to leverage them to the fullest. It covers everything you can do to grow your sales and advance your company’s vision.
The last element of SWOT analysis involves assessing the risk to a company’s growth or success. It could be competitors, financial risks, new regulations, and everything that could jeopardize the performance of a company or project.
Tips to Conduct a SWOT Analysis the Right Way
A successful SWOT analysis helps you recognize all internal and external factors that could affect your company or product. It’s a useful and simple technique to help you focus on your strengths, minimize threats, and make the most of the opportunities available to you.
Regardless of whether you use a SWOT template, project management software or perform it manually, you must follow these proven tips:
#1 Ask Questions & Answer Honestly
Uncover the aspects of your market to perform an informed SWOT analysis. And, you can’t uncover anything without asking every question in your mind.
None of the four quadrants in the SWOT analysis can be taken for granted. Given that the modern business landscape keeps evolving, you can’t list something as your strength simply because it has always been your strength.
And, the easiest and most effective way to fill all quadrants is asking a series of questions.
So ask questions for SWOT analysis, such as
- What are your unique skills and expertise?
- How do you differentiate yourself from competitors?
- Do you have all the essential resources?
- What are the industry trends?
These questions will uncover your organizational strengths, weaknesses, possible opportunities. Asking questions produces the best material for your decision making, but only when you are honest with your answers. Being honest with your answers avoids inflating or overstating strengths and helps identify your true strengths.
False and inaccurate information that goes in SWOT investigation will never produce the best decision. Also, discussing your strength and weaknesses uncovers great sources of opportunities that organizations can leverage with full control.
#2 Identify and Focus on What You Can Control
The overall goal of SWOT analysis is to uncover opportunities for an organization to improve and grow. A standard SWOT matrix has two categories: internal and external. You can conduct SWOT analysis for small business or an established one to uncover the opportunities.
The top half consists of strength and weaknesses that are internal to the organization. Organizations have a high degree of control over internal factors. The bottom half consists of opportunities and threats that are external in origin and outside the organization’s control. A SWOT analysis template provides you enough space to mention all your elements.
External factors often result from the action of competitors, regulations, legislation, and acts of God. Focus on the factors that you can control, and you will yield more consistent results.
Sometimes, internal characteristics of your organization also lead to opportunities and threats. So first, examine what weakness of your business can lead plenty of opportunities and what weaknesses can cause threats.
Reduce or remedy weaknesses to prevent your business from suffering from threats and recognize competitive opportunities.
#3 Start With External Factors
Considering internal characteristics helps create and leverage opportunities. It helps in getting results from what you already have and what you can control.
Contrarily, exploring external events helps to uncover hidden opportunities. Most often, external aspects offer both opportunities and threats. For instance, a new product launch by a competitor may be a threat to your operations, but also an opportunity to learn the competitor’s strategy in the market.
#4 Conduct PESTEL Analysis before the SWOT
PESTEL Analysishelps analyze external threats. Create a group in your organization to perform PESTEL analysis before your SWOT investigation.
Start with defining Strategic Business Objective (SBO) as the focus. Update the PESTEL as per the changes in the SBO later.
PESTEL is an acronym for:
Performing PESTEL analysis before SWOT analysis helps you identify multi-Faceted, in-depth threats.
#5 Prioritize Critical Factors
SWOT Analysis often becomes long lists of possible factors in all four quadrants. Countless factors can distract you from your real goal with SWOT.
To narrow the final SWOT Analysis, mention the most important to 3-5 factors on the top of each quadrant. Focus first on these factors while working on the SWOT action plan.
#6 “Red Team” The SWOT Investigation
A red team refers to an independent group within an organization that assumes an adversarial role and challenges the organization to improve its effectiveness. Read team is highly effective in organizations with strong cultures and specific strategies to approach problems.
In the context of SWOT analysis, the red team members act as competitors and present ideas to counter your organization’s project, product, or strategy.
Develop your SWOT Action Plan and create a “Red Team” consisting of innovative staff members in your organization. Let them develop tactics to counter your SBO project or product. The best part is red reaming is a fun and a very effective practice.
Take SWOT analysis seriously and execute it correctly. Ask questions to uncover new and accurate information. Before acting on the answers, identify what is under your control, and outline a plan. Measure weaknesses, explore opportunities and identify hidden threats.
Most importantly, remember that SWOT analysis is not a one-time activity. It is recommended to check the status of your marketplace because it is essential to success.