SWOT – Strength, Weakness, Opportunities, and Threats
The SWOT acronym is a fantastic tool for strategic planning within your business. It stands for strength, weakness, opportunities, and threats.
The strengths and weaknesses are two factors that are based on internal factors of your business whereas opportunities and threats are influenced by external factors that you and your business essentially has no control over. This acronym intends to increase awareness of the many factors that play a role in business strategy. Let’s take a deep dive at the SWOT analysis and how it can help your business.
This is a fairly self-explanatory topic. Strengths encompasses all the individual qualities that help your business succeed. They are factors that make your company stand out in comparison to others. What do you do better than the competition? A lot of the strengths of a business come from the employee’s individual strengths. Their collective strengths are what allow for a strong company. The strengths of the company can be such as what resources does the company possess that gives them leverage over the competition. Using this information, you can then take approaches that play into your company’s strengths. Again, strengths are an internal factor and you have control over them.
No one loves to know their weaknesses, but knowing what they are and identifying them in your business can help lead you to bigger successes. What areas of the business need improvement? This is a great question to start with when doing an SWOT analysis for your business. As a business or company, having a large debt and a quick employee turnover are two examples of weakness that should be addressed. These are internal and you have control over them. When you discuss these weaknesses, it allows for them to be out in the open. Once that step is taken, then you can develop a plan in which those weaknesses are addressed and not weaknesses anymore.
Opportunities will arise frequently in the business world. Some are worth taking while others may not be in the best interest. Oftentimes, when the decision is made to take the opportunity, it is because the strengths of the company allow for that opportunity to lead to leverage over other companies. It is always important to look for opportunities for growth and opportunities that play into your strengths as a whole. This is an external factor that is out of your control, however it is crucial to always be on the lookout for new opportunities and jump on them.
Again, fairly self explanatory. This is anything that may pose a harm to your business. Threats can include other companies that specialize in the same product or service as you. Drought and flooding are threats to the agriculture business. Threats will always be out there. If possible it is best to avoid them if at all possible. To be proactive, anticipate these threats. They will negatively affect your business, but if you are prepared, it will not be as drastic.