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SWOT Analysis: What It Is and When to Use It

SWOT analysis stands for strengths, weaknesses, opportunities, and threats. Used in business strategy planning, it provides an organization with an in-depth look at its competitive position and the environment in which it operates and reveals areas where improvement might be necessary. Although it’s been around since the 1960s, SWOT analysis has taken on new relevance in light of the business environment today, which requires organizations to stay on top of trends and change quickly. If you want to know more about this powerful business tool and how to use it, read on!

Read Also: 26 Great Small Business Ideas to Start in 2022

Not Just For Businesses

The beauty of a SWOT analysis is that it can be applied to just about any situation. Whether you’re applying for college, writing a new resume, starting your own business, or just trying to figure out how you can best make use of your time (yup, SWOTs apply in all areas of life!), doing a SWOT analysis is an excellent idea. The basic structure—Strengths, Weaknesses, Opportunities, and Threats—can help clarify what you have going for you as well as what may be holding you back from achieving success. Knowing these things ahead of time allows you to plan accordingly when opportunities arise in your future.

Use the following 4 steps to conduct a SWOT analysis.

Step One – List Strengths

This list should highlight all of your company’s strengths, both internal and external. Internal strengths are things like physical resources (equipment, employees), intellectual capital (expertise, trade secrets), or an advantage that you have over competitors. External advantages might include certain business relationships or government contracts.

In both cases, it’s important to make sure that your list is exhaustive. If strength is not listed in your SWOT analysis, then it probably isn’t relevant enough for you to pursue. This step should take at least one day of research into what makes your business unique. The result of your efforts should be a comprehensive list of 10-20 strengths that will likely serve as pillars for your entire operation.

Step Two – List Weaknesses

List Weaknesses

A SWOT analysis is more effective if you start by identifying your business’s weaknesses. List them all, then brainstorm ways to improve each one. As an example, if you’re in a new industry that you don’t know well, you might benefit from hiring experts who can guide your efforts. Once your list of weaknesses is complete, set goals for how each weakness will be overcome in three months, six months, and one year. For example, setting up a training program for managers or hiring a consultant would be listed as objectives for overcoming one of your weaknesses.

Also Check: Top 10 Communication Apps for Small Business

Step Three – List Opportunities

Make a list of all opportunities available in your industry or niche. Include anything that may give you an advantage over your competitors. Create another list with what you have identified as threats within your industry or niche. Write a professional post based on each of these two lists. A SWOT analysis is a simple, straightforward method for getting started on any business venture – from start-up through expansion. The first step in creating an effective SWOT analysis is identifying all of your strengths, weaknesses, opportunities, and threats.

Step Four – List Threats

List Threats

Once you’ve thoroughly analyzed your strengths, weaknesses, opportunities, and threats – it’s time to take a look at how these items fit together. After you list out all of your strengths, weaknesses, opportunities, and threats from Step Two, go back through each one. For each strength or opportunity, list out two different ways that it could turn into a weakness or threat.

After you’ve listed them out for every strength/opportunity pairings – you’ll want to go back through them again to see if any potential issues repeat themselves. This is where you might come up with actionable plans around how you can avoid certain problems or solve certain issues as they arise over time.

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