Friends, we have all heard of this advice of doing SWOT analysis in our business, right?
SWOT - Strength, Weakness, Opportunity and Threat.
SWOT analysis is a powerful tool that can help your business grow by identifying its strengths, weaknesses, opportunities, and threats. This analysis can help you make better decisions, prioritize activities, allocate resources effectively and help you with many other business strategies.
Let me help you decode, how a SWOT analysis can help your business :
One of the primary benefits of a SWOT analysis is that it helps businesses to identify their strengths.
Strengths are internal factors that you a competitive advantage over your rivals. By understanding your strengths, you can leverage them, focus on them, use them to create your competitive edge in the market.
For example, if your business is strong in innovation, you can develop new products your competitors cannot replicate. This will help your business grow by attracting new customers and increasing your market share.
It is said that A chain is as strong as its weakest link.
Friends, let us be very clear - Knowing your weakness is as important as your strengths.
Weaknesses are internal to your organisation that limits your ability to effectively compete in the market.
Now once you identify your weaknesses, don’t stop there – do something about it, take some steps to address them and improve your competitiveness.
If you want your company to function at it’s optimum ability, it is your duty to identify and fix the issues that is making you weak. You cannot afford to lag behind in any area of your business.
For example, if you are weak in marketing, invest in marketing activities, outsource marketing function, hire consultants but make sure that you improve on your brand awareness campaign and attract new customers. By identifying and addressing your weaknesses, you can plug the loophole and become more competitive in your market.
While Strengths and Weaknesses are internal to your organisation, Opportunities and Threats are external factors that does have huge impact on your company.
Opportunities are external factors that a business can exploit to gain a bigger market share.
You can check out where is the gap in the market, which are the customer expectations that not getting fulfilled, and then you can position your product to fill those gaps, to fulfil their expectations.
By identifying and understanding opportunities, you can take advantage of market trends, newer technologies, or emerging markets.
For example, if you operate in healthcare industry, you find out that there is a growing demand for telemedicine in the market. Spot this opportunity and invest in developing a telemedicine platform and fulfil this growing market demand.
Friends, by identifying opportunities in your sector, you can grow by expanding your product offerings, making tactical changes in your offerings and entering new markets.
A thorough SWOT analysis helps you identify threats in your market. Threats are external factors that can limit your business's growth and profitability.
By identifying possible threats, you can pre-empt certain challenges or obstacles and take prior steps to mitigate its impact or severity on your business and protect your position in the market.
For example, if your business operates in retail industry, you identify there is a threat of online retailers. You may therefore decide to invest in developing your own e-commerce platform or put up your products on other platforms.
Friends, By understanding your strengths, weaknesses, opportunities, and threats, you can also prioritize your activities to maximise benefits and allocate your resources effectively.
If a business has identified an opportunity to enter a new market, it can divert its resources to develop a market entry strategy. Or, if a business identifies a weakness in its operations, it can allocate its key resources to address this weakness and improve execution process and logistics. You can allocate your important resources to the areas where it will have the greatest impact.
Answer - At every stage of your business life cycle :
Conducting SWOT analysis can be helpful whenever a business is considering a new venture or needs to evaluate its current situation to make informed decisions.
Without a doubt, advantages of conducting a SWOT analysis are multiple. Taking informed and calculated decisions, Businesses can differentiate themselves from competitors, enter untapped markets, and achieve their objectives like growing their brand awareness, attracting more customers, or boost revenue.
To ensure that you are not operating without direction, start working on your SWOT analysis. It will keep your company on track and increase your chances of success.