SWOT Analysis: What’s that and How Can You Benefit from It?

Business needs to be constantly improved and adapted to changing market conditions. But before changing something, you need to analyze the situation to identify the strengths and weaknesses, as well as threats and opportunities for development. A SWOT analysis will help you with this task. It takes just a few hours to make, and it will give you the data to form a development strategy.

What is a SWOT analysis?

A SWOT analysis is one of the most common and easy-to-use types of business analysis. With it, you can identify internal and external factors affecting the success of the brand. A SWOT analysis allows you to evaluate the business’s activities according to four factors:

S (strengths) – the competitive advantages of your company, like low production costs, a solid fan community, or high KPI email-mailings.

W (weaknesses) – internal factors that impede the growth of the business and reduce your competitiveness, like an insufficient support staff or a lack of customized trigger mailings.

O (opportunities) – external factors that can positively affect business growth, like improving your website’s position in search results.

T (threats) – negative external factors that may adversely affect the further development of the brand, like having a new competitor.

Who needs a SWOT analysis?

A SWOT analysis works for absolutely all businesses. With it, startups and owners of new enterprises will be able to predict all the risks and draw up a development strategy in such a way as to become competitive even in the initial stages after launch, overtaking competitors. Older players should use a SWOT analysis at least once a year, even if things are going well.

Benefits

– Versatility. Regardless of which market share you own, whether you’re engaged in production or retail, online or offline, this analysis is for you.
– Simplicity. A SWOT analysis is very easy to do. You don’t need any complex calculations and large-scale studies.
– A complex approach. SWOT analysts take into account both external and internal factors affecting the company’s operations.

Disadvantages

– Subjectivity. There’s no standard set of indicators to consider when conducting a SWOT analysis.
– Vague results. A SWOT analysis helps to form a general picture of the company’s position in the market, but it doesn’t allow for evaluating and comparing the influence of various factors.

How to use a SWOT analysis

When starting a SWOT analysis, you should clearly define the main goals of your company. When analyzing, consider only significant factors. For instance, the delivery price that’s slightly lower compared to your competitors isn’t a significant factor.

5 rules for an effective SWOT analysis

– Conduct research on each market segment, department, and product to get more objective results.
– Don’t confuse opportunities with strengths and threats with weaknesses.
– Identify strengths and weaknesses from the point of view of the buyer.
– Use precise, unambiguous wording.
– Try to find ways to eliminate or minimize each factor of deficiencies and risks.

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