SWOT ANALYSIS

How to do a SWOT Analysis

SWOT analysis is a technique for assessing the performance, competition, risk, and potential
of a business, as well as part of a business such as a product line or division, an industry, or
other entity.
 SWOT analysis is a strategic planning technique that provides assessment tools.
 Identifying core strengths, weaknesses, opportunities, and threats leads to fact-based
analysis, fresh perspectives, and new ideas.
 SWOT analysis works best when diverse groups or voices within an organization are
free to provide realistic data points rather than prescribed messaging.

Strengths
Strengths describe what an organization excels at and what separates it from the
competition: a strong brand, loyal customer base, a strong balance sheet, unique technology,
and so on. For example, a hedge fund may have developed a proprietary trading strategy that
returns market-beating results. It must then decide how to use those results to attract new
investors.

Weaknesses
Weaknesses stop an organization from performing at its optimum level. They are areas
where the business needs to improve to remain competitive: a weak brand, higher-than-
average turnover, high levels of debt, an inadequate supply chain, or lack of capital.

Opportunities
Opportunities refer to favourable external factors that could give an organization a
competitive advantage. For example, if a country cuts tariffs, a car manufacturer can export
its cars into a new market, increasing sales and market share.

Threats
Threats refer to factors that have the potential to harm an organization. For example, a
drought is a threat to a wheat-producing company, as it may destroy or reduce the crop yield.
Other common threats include things like rising costs for materials, increasing competition,
tight labour supply and so on.
SWOT Table
Strengths
1. What is our competitive advantage?
2. What resources do we have?
3. What products are performing well?
Weaknesses
1. Where can we improve?
2. What products are underperforming?
3. Where are we lacking resources?

Threats Opportunities
1. What new regulations threaten 1. What technology can we use to improve
operations? operations?
2. What do our competitors do well? 2. Can we expand our core operations?
3. What consumer trends threaten business? 3. What new market segments can we explore?

When do you use SWOT?

A SWOT analysis can offer helpful perspectives at any stage of an effort. One might use it to:
 Explore possibilities for new efforts or solutions to problems.

 Make decisions about the best path for your initiative. Identifying your opportunities for
success in context of threats to success can clarify directions and choices.

 Determine where change is possible. If you are at a juncture or turning point, an inventory
of your strengths and weaknesses can reveal priorities as well as possibilities.

 Adjust and refine plans mid-course. A new opportunity might open wider avenues, while a
new threat could close a path that once existed.
SWOT also offers a simple way of communicating about your initiative or program and an
excellent way to organize information you've gathered from studies or surveys.

How to do a SWOT Analysis for a Business Plan?

There are two types of factors in business: Internal and External. The factors which would
exist irrespective of the existence of a specific organization are considered to be external and
those that exist within an organization are of course, internal.
Implement the below mentioned 8 steps for SWOT analysis to develop a business plan:

1. Have a clear SWOT analysis objective: The marketing team can discuss which topic
needs immediate attention and this objective can be put to paper. This way, SWOT analysis
can be conducted in an organized and effective manner. For example, if an organization
intends to know whether or not to launch a new product – this becomes the primary objective
of SWOT.

2. Conduct research to understand the target market and industry: For successful

implementation of SWOT, there should be a thorough understanding of what the market has
to offer. Insights obtained from research about technology, customer service, competitors,
etc., can be used to conduct an exhaustive SWOT analysis.

3. Identify business’s strengths: An organization should understand what their strengths are,
what are those features of their functioning which are better than the others in the market.
Answers to these questions must be noted down. Workforce, location of the organization,
product quality, etc. are some examples of an organization’s strengths.

4. Identify the business’s weaknesses: There are certain elements of the organization which
needs improvement. Marketers should create a list of these elements which they believe are
harming their reputation in the market. Acknowledging these weaknesses and working to
eliminate them should be the intention of the analysis. This list can include aspects such as
the reduction in product clients, constant downsizing of market share, lack of proper staff
member’s.

5. Identify potential opportunities: Evaluate external factors which can be lucrative for

business growth. These are not internal and there are chances of the same factor being a
threat to the business as well. While listing opportunities, one should keep in mind that
opportunities should not be a threat to the business. For example, launching a new feature
after opportunity analysis might cause damage to business in case there are competitors who
offer the same feature at lower costs.

6. Identify threats to the organization: Note down factors that are not a part of an
organization’s ecosystem but are threats to business growth. Unstable markets, the increasing
competition in the market etc. are some threats to a business.

7. Allot importance to various factors from SWOT analysis: After completing step 3 to

step 6, four different lists will be formed. The ideal way of amalgamating these lists is
 creating a side-by-side matrix. A matrix helps in generating a comprehensive picture for
SWOT analysis.

Once the lists are put into a matrix, the degree of importance corresponding to each of the
points so that marketing strategies for immediate implementation can be put into action.

Ask the following questions to understand the priority:

 Can the organization implement their strengths to benefit from existing opportunities?
 Can the organization implement their strengths to get a grip on identified threats?
 What are the steps to be taken in order to make sure the organization’s weaknesses do
not hinder taking advantages of the opportunities?
 What can be done to reduce weaknesses to get a grip on threats?

8. Create a strategy to solve identified problems: After creating the SWOT matrix and
answering all these questions, the marketing team can work to create marketing strategies to
attain organizational aims.

SWOT Analysis Example with Questions

Purpose: Launching a new mobile variant
Strengths:
 What are your strongest assets?
 How are your products/services better than competitors?
 What is your unique selling point?
 How efficient is your workforce?
 What do your existing customers have to say about their experience with your
organization?

Weaknesses:
 Which sections of your organization need improvement?
 Which aspects of your business can the competitors benefit from?
 Do you lack subject matter expertise?
 Do you think your business has made enough money?
 How progressive are your competitors in terms of coping with market trends?
 Opportunities:
 Which trends do you think can bring you new opportunities?
 Will these trends benefit the market?
 Where does the current market lack?
 Are your competitors not successful in meeting customer demands?
 If yes, can you target those customers?

Threats:
 Are there competitors in the market who can cut down your business?
 What are the roadblocks you are currently facing?
 Do your products/services comply with every existing law?
 Do you foresee a change in government laws in the near future?
 Do you believe your target audience might evolve in their product preferences?

TOWS analysis: Developing strategies from your SWOT analysis

Once you have identified and prioritized your SWOT results, you can use them to develop
short-term and long-term strategies for your business. After all, the true value of this exercise
is in using the results to maximize the positive influences on your business and minimize the
negative ones.

But how do you turn your SWOT results into strategies? One way to do this is to consider
how your company’s strengths, weaknesses, opportunities, and threats overlap with each
other. This is sometimes called a TOWS analysis.

For example, look at the strengths you identified, and then come up with ways to use those
strengths to maximize the opportunities (these are strength-opportunity strategies). Then, look
at how those same strengths can be used to minimize the threats you identified (these are
strength-threats strategies).

Continuing this process, use the opportunities you identified to develop strategies that will
minimize the weaknesses (weakness-opportunity strategies) or avoid the threats (weakness-
threats strategies).