Developing a business strategy is one of the most important aspects of launching a successful startup. Knowing how to structure your ideas and practically implement them will separate you from the competition and help you grow your enterprise.
Today, we will be taking a closer look at a specific entrepreneurship tool, which has been used by some of the leading global corporations and various small and medium businesses around the world – the SWOT Analysis. Then, to successfully layout your future opportunities and find the right ideas, we will show you how to conduct a comprehensive examination of your business plan step-by-step properly.
So, what is a SWOT Analysis?
‘SWOT’ is an acronym, which stands for Strengths, Weaknesses, Opportunities, and Threats.
Evaluating the strengths and weaknesses of your company is what will allow you to take control over the direction in which you want to develop your business. In addition, understanding external factors, such as the potential growth opportunities and the possible threats that can lead to failure, will help you stay relevant on the market.
A SWOT analysis will assist you in organizing all the aspects of your business strategy and give you an overall perspective of how you should proceed in the future. This way, you can prioritize the work, which will provide you with an advantage before the competition, and leverage your current market position to find the right growth opportunities.
How to conduct a SWOT analysis? (step-by-step)
Decide what the objective of the analysis is
To conduct a successful SWOT analysis, you must define your main objectives from the start. You should find out if most of your current problems are connected to the inner processes of the business or whether the company should focus more on the external opportunities, which are present at the moment. These include introducing a new service/product, finding your way into a new industry, managing business relations, or simply improving the cohesion of your team or the manufacturing process.
Research the specific industry and market
To stay relevant in the sphere of development that you have chosen for your company, you should first research the competition and the customer demand/trends, which are currently viable in the field. You can do that more efficiently if you talk to your team, partners, and clients and discuss the market opportunities you can benefit from the most.
Always start with your business’ strengths
After you have prepared your market analysis, you should start writing down the different aspects of your business. You must always start listing your company’s strengths, as they are the foundation on which your whole business strategy works. The ‘strengths’ could be related to your financial resources, price advantages, marketing, office location, and others. You must make sure to define your biggest strengths first, as that will help you get an overall outlook on the possibilities for development.
Determine your weaknesses
Determining your weaknesses is probably the most challenging part of conducting a SWOT analysis. To successfully do that, you must objectively assess the processes in your company, which are currently lacking, or the disadvantages that you have, compared to your competition. Weaknesses could include the absence of unity between your team members, struggles to offer your clients interesting new products or services, or the lack of intellectual property development. Listing your soft spots will assist you in understanding the improvements that you need to make in the future. It will also help you optimize the inner processes in your company so that you can derive the maximum from your business ideas.
List potential opportunities
After you have reviewed the internal factors of your business, it is time to look at the potential market opportunities that will help you grow your company. Don’t forget that there could be countless development options, from which you should prioritize only the ones that seem most reliable and profitable for your niche. Here, you should assess the current market trends (which you have already written down) and consider how you can turn them into profitable endeavors. This could mean the introduction of a new product or the improvement of business to customer relations. When listing potential opportunities, you must never forget that a good product and a happy client are the foundation for success.
List potential threats
‘Threats’ to the business are all external factors that could lead to problems with the invention and delivery of new products. Such is the loss of essential personnel, increasing competition, constantly moving markets, and all kinds of technical issues. Therefore, when conducting a SWOT analysis, you must always make sure to separate your threats from your opportunities and not list a product as both a liability and a potentially successful market offer.
Make an overall evaluation of your analysis and find the most pressing issues
When you are done prioritizing your business’s strengths and weaknesses and successfully evaluating the growth possibilities and potential future threats, it’s time to make the correct conclusions and decide how to proceed with your business strategy. Before anything else, you should first find the most pressing issues with your current business processes. After that, see which of them need immediate attention and which could be dealt with later.
Develop a strategy to deal with the company’s current problems and rank your ideas for development
After you have sorted the changes that need to occur in your company, you should adequately develop a strategy to address them. Moreover, this is the time to list all the ideas you have come up with during the analysis and find your new market priorities. Finally, think about how you can use your strength to take advantage of the current trends, decide in which way you should deal with the most pressing issues, and find out how to minimize or completely erase the business’ current weaknesses.
The SWOT Analysis will help you achieve your goals and stay relevant in the long-term
As one of the most widely used tools in entrepreneurship, the SWOT analysis is a powerful method that could help you achieve continuous growth and deal with the problems stopping your current development. No matter how experienced you are in the industry, analyzing your business strategy and seeing the “big picture” will benefit your business and help you find the path to imminent success.