SWOT analysis has been used for decades and gives you a systematic way of analysing the market, and when combined with other analysis tools such as PESTLE (see below), can be a great way to reduce the risk of missing something important. There are just so many things out there that it’s easy to miss crucial things if you are not careful. So what the heck is SWOT Analysis? Why should you do it? And how on earth do you do it? Let me tell you how – it’s actually quite fun ;)
What Is SWOT Analysis?
SWOT analysis is an evaluation tool. It can be used to evaluate a business venture or other kind of project, and lately SWOT is being applied in various other situations, such as personal development. For our intents and purposes, we can use it to evaluate our business, our products and/or services and the marketing of our business, products or services.
The analysis has four parts (S – W – O – T) which examine internal and external factors and their potential influence on the project in question. Let’s look at them in turn:
S = Strengths
W = Weaknesses
This refers to strengths and weaknesses within the business or project team. These are internal things – the sort of things that are up to us. If the project is marketing, we may have strengths such as a good knowledge of SEO or a great graphic designer on board, but we can also have weaknesses, such as a limited budget or lack of knowledge of Facebook advertising (if that is something that matters to our marketing). These need to be things that don’t apply to other players in our market. If all of them are great at SEO and can afford to hire a great graphic designer, then it’s not a strength of ours. If the other players in the market also have a limited budget and don’t know how to do Facebook advertising, then it is not a particular weakness of ours – it’s actually a potential opportunity to get ahead of them.
O = Opportunities
T = Threats
Opportunities and Threats refer to things in the outside environment that may impact our project and we can essentially not do anything about as such. We can only react and adapt, but not change the facts. These can be things like the weather, the economy, demographic developments and such and they can be good for us (hence providing opportunities) or bad (hence threats).
Why Do SWOT Analysis?
It’s really quite simple. You want to be aware of your strengths, so that you can best use them in your business; your weaknesses, so that you can find a way to improve upon them and neutralise their impact; the opportunities in the marketplace so that you can take advantage of them and the threats out there, so that you can be prepared and minimise their negative impact on your business.
How Do I Do SWOT Analysis?
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