What is SWOT analysis? Why is it important for your business?

Have you come across the term SWOT? If you're an enterpreneur, you must have heard this term before.

SWOT analysis is a technique that involves strategic planning to enable business growth by identifying and analyzing an organization's Strengths, Weaknesses, Opportunities and Threats.

Using SWOT analysis for your business is a wonderful way of identifying the loopholes and flaws that are stopping your business's growth.

The idea is to analyze the negative areas and strategies of your business that can be improved to maximize opportunities of growth, boost your sales and increase the overall profits.

Now the question is, how do you do the SWOT Analysis?

In this article, we'll look at how to do it so that you can identify how to improve your business. So let's get started.

The 4 Quadrants of SWOT Analysis?

A good SWOT analysis will always assess both internal and external factors, as well as current and future potential. By doing that you can have a data-driven look at your company's strengths and weaknesses.

Experts divide SWOT analysis into 4 important quadrants. Each of these quadrants dedicates an element of SWOT. Let's look at them in more detail.

1. Strength

Just as the name says, analyzing the strength means to look at those aspects of your business, in which it excels at. It also helps you identify the areas that the company stands apart from its competition.

So you can look at aspects like -

• What is your competitive advantage?

• Which of your products or services are performing well?

• What are your assets?

• How skilled is your team?

2. Weakness

Identifying the weakness of your company is important so that you can work on those areas to overcome your challenges, remain competitive and perform at an optimum level.

Some of the questions to look at to identify your company's weaknesses are -

• Which of your products are underperforming?

• What areas of your business need improvement?

• How to bridge knowledge gaps in your company?

3. Opportunities

Opportunities are nothing but those favorable aspects that can help you get a competitive edge in the market. Knowing these factors is important so that you can strategically plan to achieve your goals.

Let's look at some of the questions to look at to determine your business opportunities-

• What is your unique selling proposition?

• How is your business different from others?

• What unique resources do you have access to?

• What technology can you use to improve your operations?

• What new segments can you explore in the market?

4. Threats

BY identifying the threats to your company you can identify the potential challenges and problems that can prevent your overall growth. Knowing this can help you take the necessary steps on time to prevent damages and minimize your losses.

The following questions can help you work on overcoming your challenges -

• What new market segments can affect your business?

• What new technology do you not have?

• What skills are your team is lacking?

• What new regulations threaten operations?

• Is your data well protected?

Benefits of SWOT Analysis

There are several benefits of performing SWOT analysis for your business.

1. It helps your business stay updated about the current status of your business and helps you measure your overall business performance.

2. It enables you to strategically change your moves by adapting to market trends to meet your desired business goals and objectives.

3. It's a wonderful way of identifying and highlighting your weakness so that you can take the necessary steps to prevent further damages and losses.

4. By analyzing your strengths you can use it in a stronger way to penetrate the changing market.

So that's about SWOT and why you should use it for your business. I believe if you want to beat your competitors and boost your profit SWOT analysis is one strategy you just can't miss. If you have done it already, do let us know how it helped your business and why you recommend other businesses to implement it. We would love to hear from you.