Streamlining your business

How to perform a SWOT analysis

A SWOT analysis is an incredibly effective and powerful tool in business planning and analysis that pinpoints pros and cons. It helps you visualise where you stand on projects, business goals, new opportunities, potential risks and make better business decisions. 

Regardless of your business size, a SWOT analysis can help you build a solid business strategy and lay the foundations to achieve your goals. So, let’s dive in.  

WHAT IS A SWOT ANALYSIS?

SWOT stands for: 

Strengths – what your business is doing well and gives you a competitive advantage.

Weaknesses – what the business is lacking or what your competitors do better.

Opportunities – openings in the market that can help grow your business.

Threats – roadblocks or increased competition that can impact your business model.

Strengths and weaknesses are internal factors so they can be controlled within your business. Opportunities and threats are external factors and can be influenced by changes in the market, trends, government regulations or new technology disrupting the ebb and flow. 

A SWOT analysis can be presented in different ways, but it always consists of four categories. The most common style is a two-by-two grid with strengths and weaknesses at the top and opportunities and threats adjoining below. 

BENEFITS OF PERFORMING A SWOT ANALYSIS

  • Helps to clearly visualise positive and negative information.
  • Allows teams to consider new approaches and understand different perspectives.
  • Provides a practical framework for business planning and analysis.
  • Guides decision-making and helps identify future goals or actions.
  • For larger organisations, it can be applied to each business unit rather than the business as a whole. 

BEFORE YOU START

Think of the specific goal or business objective you wish to analyse and consider the key stakeholders to engage for their input. They can be decision makers, project leaders, managers, partners or customers.

Allow enough time for them to consider the current business conditions and to research market trends or the global landscape that may have impacts. 

PERFORMING A SWOT ANALYSIS

  • List out your key points for each category in a concise way.
  • Arrange findings in order of importance to help you prioritise.
  • Once you have everything tabled, you can start analysing it.
  • If the positive factors outweigh the negative, it may be a good decision to proceed with the business objective or goal. If the negative factors are more dominant, you may need to make adjustments or discard the ideas.
  • Finally focus on leveraging your strengths, reducing your weaknesses, seizing viable opportunities and minimising the impact of threats.
  • Update it regularly, each quarter or at least on a yearly basis. 

Next steps

After you’ve completed your SWOT analysis, you will have a clear picture of where you are at, and any issues your organisation may need to address. From here, you can evaluate each category and develop a strategy to move forward.

Jenny Dikranian

Content Writer, Business Australia

Jenny Dikranian is a content writer passionate about entrepreneurship and innovation in inspiring business success.

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