This post teaches persons how to do SWOT Analysis which is an important tool for making business and personal decisions. SWOT is an acronym for strengths, weaknesses, opportunities and strengths.
SWOT analysis is an analysis tool used to determine:
Develop a Plan
You need to determine how you can leverage your strengths to help you to achieve you objectives.Ensure that strengths etc listed, you have evidence that they are strengths and can defend your classification of them.
You need to prioritize your weaknesses, given your intended direction and develop a plan to improve in those weak areas that can negatively impact your achievement of your goals. Group according to those that can be readily changed and those that are problematic to change and by the degree of negative impact on the business. You can also look at the possibility of sourcing missing required critical skills etc. Be honest in your assessments. You may wish to do some more work on your weaknesses by grouping similar areas of weaknesses and trying to determine the root causes. For example high staff turnover is a symptom of something which can be poor management. You need to fix the management to fix the problem.
Critically analyze your opportunities and determine those that you have the capability of positively exploiting and make a plan to exploit them.
Examine the threats to your business and determine how you can mitigate their negative impact.
In planning remember to Set and determine key milestone, persons who can help you, available resources – including personnel and funding, possible barriers to achieving your goals, etc.
How often to do a SWOT Analysis
In order to be effective, you need to use your initial SWOT to come up with some possible options for future action and having determined possible directions for yourself or business, do a SWOT of each possible option you may be thinking of exploiting e.g. If you want to become a doctor, you will have different strengths and weaknesses and opportunities and threats than if you want to become an concert singer.
Throughout your life as you think of exploiting possible opportunities or of recovering from adverse circumstances, you will have to do a SWOT.
How to perform a SWOT Analysis provides an example of a worked SWOT Analysis
- strengths and weaknesses of businesses or persons – internal analysis
- opportunities available in the external environment to persons or businesses and threats in the external environment that can negatively affect persons and businesses. This is external analysis
- Employee performance/productivity
- loyal customers, good networks
- Reputation in the marketplace – your customers and or suppliers have a good perception of the operations of your business
- Business Profitability, or healthy cash flow and/or the ability to finance operations
- You own significant Assets- machinery/equipment/buildings/ copyrights, patents, etc.
- Relevant and up to date training and experience of owner and/or staff/people skills
- Good Location of business
- Management and staff are experience in their various activities,
- Good products/services
- Poor product or service
- Poor knowledge of the issues of the business sector you operate in
- Lack of family support
- Lack of business experience
- Absence of important skills
- Poor Marketing Skills
- Poor customer service
- Limited funds for operating costs and/ or business expansion
- Poor cash flow
- Poor management skills
- Poor marketing of product
- A new market-a new housing development comes near your business
- The opportunity to more effectively exploit the Internet- selling opportunity
- Available subsidy/business grant from government or large multinational companies operating in your area
- Changing consumer tastes that create more customer need for your product or one you can make
- New competitor comes into my market
- Loosing market share
- Increased taxes on materials you use /property and other taxes that eat into your profits
- Crime – robbery in my area- you operate in a hot spot
- Recession and its negative impact on buyer spending
