SWOT analysis is a powerful way to evaluate a business, company, or project. Therefore, the point of a SWOT analysis is usually to come up with a strong business strategy by putting into consideration the strengths and weaknesses of the business as well as the opportunities and threats it faces.
What is SWOT Analysis?
SWOT analysis is typically the collection and display of information about the internal and external factors which have, or may have, an impact on a business, company, or project. SWOT is an acronym which stands for Strengths, Weaknesses, Opportunities, and Threats. Therefore, a SWOT analysis refers to the technique used to define and determine the Strengths, Weaknesses, Opportunities, and Threats of a business, company, or project.
Understanding the Element of SWOT Analysis
The first step in writing a good SWOT analysis is collecting the right information. A good SWOT analysis contains the following to illustrate better the internal and external factors affecting a business.
Strength in SWOT analysis refers to the internal factors that give the business an edge, the things that the company or project does well. These factors and things can be tangible and intangible positive attributes.
Questions To Ask To Identify The Strengths
- What do you do well?
- What are the internal resources? Such as capital, credit, existing customers, credentials, network, reputation, or skills.
- What are the advantages over the competition?
- What are the positive aspects that add value?
Weakness in SWOT analysis refers to the internal factors that detract from the value you offer or place you at a competitive disadvantage. Also, it refers to the internal factors holding the business, company, or project back.
Questions To Ask To Identify The Weakness
- What are the internal factors that impede the ability to obtain or maintain a competitive edge?
- What are the areas that need improvement to be able to achieve the objectives?
- What does the business, company, or project lack?
- Do you have limited resources?
- What do you lack in functional areas?
Opportunities in SWOT analysis refer to the external factors that serve as reasons why the business is likely to succeed and prosper. It also refers to factors in the environment that are likely to contribute to the business’s success.
Questions To Ask To Identify The Opportunities
- What are the opportunities in the environment or market that you can benefit from?
- Is the perception of your business, company, or project positive?
- What are the changes or the events that you might be able to take advantage of?
- Are there positive regulations that benefit the business?
Threats in SWOT analysis refer to the external factors that could place the business at risk. It also refers to everything outside your control that poses a risk to either your company itself or its likelihood of success.
Questions to ask to identify the threats
- Who is the competition?
- What are the external factors that could put the project at risk?
- What are the regulation and trends that are unfavorable to the business?
- What are the changes that can affect resources negatively?
- What innovation or new technology that can render your products obsolete?
Structure of SWOT Analysis
After gathering the information for each element needed for SWOT analysis, it is time to display the information properly. You can display the information for SWOT analysis articulately by following these steps.
To start, you will have to draw a large square to be divided into four small squares with two at the top and two below.
Each of the squares should be labeled. The top left box should be labeled “Strengths,” and the top right box should be labeled “Weaknesses.” Also, the bottom left box should be labeled “Opportunities,” and the bottom right box should be labeled “Threats.” Remember, these are titles, so they should be distinguished from the rest of the text.
Add the factors that affect the business in the right box. Also, the factors should be listed in a bullet form.
Remember to analyze the SWOT diagram and make sure to note if the positive outcomes outweigh the negative. The point of SWOT analysis is to figure out if the business or project can be successful as it is, therefore, it is important to note that in your conclusion.