Many companies conduct SWOT analyses to determine the status of business conditions and the organization’s viability. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. The analysis looks at internal factors as well as external factors which can affect it. Strengths and weaknesses are internal factors; opportunities and threats are external factors. SWOT analyses can be performed on an annual basis or as needed whenever there are organizational changes or economic conditions that warrant an in-depth assessment.
Examine your company’s internal strengths. Strengths include the talent, skills and qualifications of your workforce. Your organization’s human capital is the most valuable resource you have. Without human capital, a term used to collectively describe your employee base, your organization would not survive. Take inventory of your workforce capabilities through a human resources audit of qualifications and expertise. Invest in a system for tracking employee training so you have updates on employees’ newly acquired skills, expertise and qualifications. Internal strengths may also include your business locations, number of products and services you offer, as well as the quality of your products and level of customer service. Look at your product and service offerings to determine if your business is at capacity and consistent with customer demands. If you target a niche market and are one of few companies that provides a particular product or service, that’s also considered a strength. For example, if your organization is the only one in a remote area that provides mail forwarding service in an area inhabited by expatriates who need to communicate with stateside friends, family and business, your service can count its primary service as an internal strength.
Assess your organization’s weaknesses. Internal weaknesses could include a flawed recruiting system or an ineffective recruitment strategy. Turnover also is considered a weakness. Weaknesses inside the organization usually can be corrected with strategic planning, training and development or a combination of all three. Develop training to resolve weaknesses related to personnel issues. Weaknesses also include products of poor quality or inadequate customer service. Compare the costs, service and convenience of switching vendors or suppliers of raw materials to improve the quality of your company’s products.
Evaluate opportunities for your company. These are external factors that can improve business conditions. Opportunities include new or expanding markets, research and development for new products, or greater demand for your products and services. In addition, opportunities may arise due to a competitor’s demise or an influx of customers from a neighboring business. For example, if your business provides quick-serve lunches and a new factory builds a nearby work site, your customer base could improve due to workers in close proximity to your lunch spot. Another example of external factors considered opportunities may be a nursing school that’s matriculating students who will be joining the workforce. If your organization happens to be a health care facility, you can benefit from a ready pool of qualified recruits that will protect you from the reported nursing shortage.
List businesses and incidents that pose a threat to your organization. Conduct a survey of businesses providing similar products of a higher quality, or businesses that may compensate its employees with higher wages or better benefits. An external threat concerning personnel could be companies with the capability to recruit more qualified applicants or steal employees from your workforce. Review the competition and business climate to determine additional external factors that can threaten the stability of your company or threaten to decrease the demand for your company’s services.