What is Swot Analysis

25 April 2017   |   Startup, Blogs
What you mean by SWOT ANALYSIS in startup ideas.

A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, sometimes also called a SWOT matrix, is a tool that businesses can use to assess their place in the market or evaluate one of their projects. SWOT analyses can take many forms, but they often appear as a chart with four quadrants, as shown in the example below. Writing in complete sentences improves clarity and reduces the likelihood of confusion emerging among those reading the SWOT analysis. Performing a SWOT analysis involves four factors:

  • Strengths: advantages that the business or project has over its competitors
  • Weaknesses: disadvantages that the business or project has compared to its competitors
  • Opportunities: external resources or circumstances that the business or project could use
  • Threats: external elements that could impede the success of the business or project
A SWOT analysis helps you make smart, informed business decisions.

Understanding your company's position within your market or industry and knowing how and where you can grow is critical for any business owner. This knowledge allows you to strategically develop your company rather than wasting your efforts trying to expand into a market that doesn't align with your business or being steamrolled by a surprise competitor. SWOT – which stands for "strengths, weaknesses, opportunities and threats" – is a type of analysis that helps you develop your business strategy by comparing internal factors (strengths and weaknesses) against external factors (opportunities and threats). Examples of internal factors include things that you have control over and can change, like your staff or your intellectual property. External factors are things that you cannot control, like consumer trends or competitors.

A SWOT analysis gives you a detailed, unbiased overview of your business as a whole a specific product or campaign. It can also help train your brain to consider every factor that could possibly affect your project or business. When you're facing a tough issue or if you're just unsure of your current strategy, a SWOT analysis illuminates details so you can formulate actionable plans based on each of the four quadrants.

A SWOT analysis should be a collaborative effort between several levels of employment within your company. Founders and leaders should be the most closely involved, but to gain a true picture of your business, gather input from a group of people that can contribute several perspectives.

A SWOT analysis gives you a firm grasp of what is affecting your business internally and externally

Lynne Pratt, creative content director at Virtual Solutions Global

A SWOT analysis is a great way to guide business-strategy meetings. It's powerful to have everyone in the room to discuss the company's core strengths and weaknesses and then move from there to define the opportunities and threats, and finally to brainstorming ideas. Oftentimes, the SWOT analysis you envision before the session changes throughout to reflect factors you were unaware of and would never have captured if not for the group’s input. A company can use a SWOT for overall business strategy sessions or for a specific segment such as marketing, production or sales. This way, you can see how the overall strategy developed from the SWOT analysis will filter down to the segments below before committing to it. You can also work in reverse with a segment-specific SWOT analysis that feeds into an overall SWOT analysis.

A SWOT analysis is a tool for documenting internal strengths (S) and weaknesses (W) in your business, as well as external opportunities (O) and threats (T). You can use this information in your business planning to help achieve your goals. To work out if something is an internal or external factor, ask yourself if it would exist even if your business didn't. If it would, then it's an external factor (e.g. new technology). Use the following 8 steps to conduct a SWOT analysis.

  • 1.: Decide on the objective of your SWOT analysis
  • 2.: Research your business, industry and market
  • 3.: List your business's strengths
  • 4.: List your business's weaknesses
  • 5.: List potential opportunities for your business
  • 6.: List potential threats to your business
  • 7.: Establish priorities from the SWOT
  • 8.: Develop a strategy to address issues in the SWOT

Review your 4 prioritised lists by asking:

  • How can we use our strengths to take advantage of the opportunities identified?
  • How can we use these strengths to overcome the threats identified?
  • What do we need to do to overcome the identified weaknesses in order to take advantage of the opportunities?
  • How will we minimise our weaknesses to overcome the identified threats?
Once you have answered these questions and finalised your lists, you can now use the SWOT analysis to develop strategies for achieving your business goals.

Advantages of SWOT Analysis

A SWOT analysis is a great way to guide business-strategy meetings. It's powerful to have everyone in the room to discuss the company's core strengths and weaknesses and then move from there to define the opportunities and threats, and finally to brainstorming ideas. Oftentimes, the SWOT analysis you envision before the session changes throughout to reflect factors you were unaware of and would never have captured if not for the group’s input.

A company can use a SWOT for overall business strategy sessions or for a specific segment such as marketing, production or sales. This way, you can see how the overall strategy developed from the SWOT analysis will filter down to the segments below before committing to it. You can also work in reverse with a segment-specific SWOT analysis that feeds into an overall SWOT analysis.