How to Do a SWOT Anaylsis

A SWOT analysis is used to assess the position of a firm in a competetive market.

SWOT means strengths, weaknesses, opportunities and threats. A SWOT analysis is used by organizations to assess the position of their firm in a competitive market and to discover potential issues that might arise in the course of a venture. A SWOT analysis enables companies to develop contingency plans in anticipation of potential problems. It also helps them study their potential for increased profitability and processes to further improve their product. The SWOT analysis is divided into four phases.

Things You'll Need

• Pen
• Paper
• Computer

Instructions

1. 

   List the strengths of your company.

   List the strengths or advantages of your company. This could be the things that your company does better than every other business. It could also be the unique selling point that gives your company an edge over the competition. Look at this perceived strength from the perspective of a potential customer, the perspective of the competition and your own point of view. If the competition is doing the same thing or even something similar, then what you perceive to be a strength might not be a strength but a necessity to survive in a competitive market. When you have listed your strengths, they need to be built upon or sustained.

2. 

   Analyze the weaknesses in your company.

   Analyze the weaknesses in your company. The lack of a certain strength can be construed as a weakness. Probe your weaknesses by asking yourself certain questions, such as what the competition might perceive as a weakness, how to improve or eliminate the weakness and how to develop a plan to limit the loss of sales. A weakness could be a weak brand name, poor customer service and poor distribution planning. A weakness could also be a lack of access to low-cost resources or a poor location. By studying the mistakes of the past, it is possible to avoid certain pitfalls that have contributed to the weakness of your company.

3. 

   Make a list of your opportunities.

   List opportunities for your company. Opportunities are the external factors that exist in your operating or business environment from which you can benefit. Examples of opportunities are amendments to import and export constraints, weaknesses or vulnerabilities of competitors, global influences and market developments.

4. 

   List all the threats that your company faces.

   List all the threats that your company faces. Just like opportunities, threats are external to the company. Threats could involve the actions of the competition. A change in technology could also affect your business. There might be a general decline in the growth of the market. Changes in the foreign exchange could also affect your business in a negative way and as such can be considered a threat.

References

• RapidBI: How to Do a SWOT analysis
• Mind Tools Ltd.: SWOT Analysis
• Quick MBA: SWOT Analysis