SWOT Analysis: The simplest tool you should use for a strategic business planning
SWOT is the acronym for strength, weaknesses, opportunities and threats. It is a free analysis tool using which you can use to understand and strategize a business plan, which dodges the external threats and helps overcome internal shortcomings or weaknesses.
Before implementing a business plan, you can analyze the external markets, study the opportunities, threats, competition, and find out whether the internal factors like organization's staff is equipped to tackle the challenges head-on. And, if not, then where does it need work to get better and competent?
The analysis tool will help you only if the statistics, research, and the data collected are accurate. What are you waiting for, conduct an analysis today, and uncover the opportunities that await!
To conduct a SWOT analysis, you can take the help of a SWOT analysis ppt while planning your strategy.
Benefits of SWOT analysis for an initial internal and external strategy analysis
With the SWOT analysis, you prepare yourself by evaluating your strategy at different levels. Once you have identified the weakness, strengths, and opportunities, you can bridge the gap between expectations and reality. So, the SWOT analysis tool is a useful tool that helps you to fine-tune your process.
Read down below to understand how a SWOT analysis benefits you and help you to formulate an effective business plan. The SWOT analysis can help determine the internal and external factors that can affect a company's business strategy.
External Factors
There are many external reasons affecting a company, and with the SWOT analysis tool in hand, you can visualize how the technological, economic, demographic, governmental, cultural factors could turn into an opportunity or a threat.
- Market Analysis
You can check on the expected profitability, distribution system, trends, entry barriers, cost structure, distribution system, profitability, trends, and critical success factors. Businesses are all about the profits, and about grabbing on the opportunities. With SWOT, you can understand the latest consumer trends and changes in the markets. The strengths will get the highlight, and you will know the strengths that make you stand out and different from the competitors. So, while forming a business plan how to work on your strengths to outweigh the shortcomings.
- Economics Survey
You can find out about the economic factors that can impact your business activity like unemployment levels, interest rates, inflation, disposable income, energy availability, etc.
- Government Regulations
Recent changes in government policies? How will it impact the industry? Are there any regulatory and political stability risks? Government regulations are a major factor that can make or break your business, but if you are already prepared, you have a long way to go.
- Key Areas of Uncertainty
You must know what could be the possible future events and how uncertain is the future for your business. The SWOT analysis will give you an insight into the trends and events that could impact your strategy.
Internal Factors
The internal factors you can analyze using the SWOT tool are your company’s capacity to adapt according to the changing market scenarios. The internal factors also include a set of shortcomings, drawbacks that exist within the firm. If these internal factors are initially found out, you will understand if a business is well-equipped with a talented workforce.
- Efficient Employees
You will be able to determine whether the professional, technical, and educational qualifications and capabilities of the employees are in line with the project requirements. You will also find out where you lack? Whether there are any older disputes with the labor, the employees. Because, plans work better if everybody works together as a team.
- Reputation with the Customers
It helps find out the consistency of the company performance. How trustable is your brand in the market, and how it is better than the competing brands? SWOT analysis will help you evaluate the percentage of buyers who repeatedly prefer your brand over the competitors.
- Technological Efficiency
You will be able to find out and analyze whether you are well equipped with proprietary technology like patents, trade secrets, copyright and human resources for the application of technology.
After conducting a SWOT analysis of your business, you will gain clarity, identify, and evaluate the following:
- Finding out the competitors and their marketing strategy?
- It will help find out the potential competitive entrants and the barriers that may come in between?
- Who are the makers of substitute products, and how are you different from them?
- Weighing the power and strength of the competitors based on competencies and assets?
- Helps determine the driving force behind sales
- How profitable is the market?
- Alternative channels of distribution
- What are the key market trends?
SWOT-analysis helps businesses formulate strategies by helping evaluate various internal and external factors. SWOT analysis is highly-effective in the long run and it can help companies find out their core competencies and overcome the shortcomings.
