How to Utilize SWOT in Business Planning

Many companies suffer from a lack of planning. Each year, a company should complete a detailed business plan, marketing plan and strategic plan. This enables a company to analyze what works and what doesn’t, plan for changes and additions and establish a budget. This takes time and resources and many companies prefer to bury their head in the sand. For those companies that suffer from this affliction, an analysis of the company’s strengths, weaknesses, opportunities and threats (SWOT) is a less intrusive but highly effective means to evaluate progress.

Instructions

Difficulty: Challenging

1. To analyze your strengths, evaluate your organization internally. Determine areas where your company excels compared to its historical averages, industry averages, or market placement. You should evaluate your capital needs. Do you have adequate financial resources? Is your technology keeping you competitive? Do you have an experienced and skilled staff? Consider where your product or service ranks in the industry and your local market. What sets you apart from the competition? Do you have an impressive product line?
2. Weaknesses require a true self-assessment, admitting to shortages and deficiencies that exist. Weaknesses in infrastructure and product and service should be evaluated. The same items considered for strengths may be weaknesses. Are you short on staff? Do you lack an aggressive marketing campaign? Are timelines delayed in product development? Is the company culture and environment negative or positive?
3. Opportunities are external factors that help to promote your business through no effort on your part. Has a competitor left the marketplace? Have new tax laws or foreign trade policies made it possible to expand? Consider demographics and expansion in your area. Is the population growing? Is there new commercial or residential development? Where is the product lifecycle and what is is the market size?
4. You should understand your industry environment and this exercise in acknowledging threats to your growth and profitability will give you the opportunity to evaluate and plan. Threats should be analyzed from every economic standpoint. Consider legal impacts, tax implications, new entrants to your market, labor and economic indicators.

Tips & Warnings

• When evaluating your company, I suggest asking every department to perform their own SWOT analysis as it pertains to their roles and responsibilities as well as their attitude and perceptions of the company.