Here’s an explainer how to make a good SWOT analysis for your business.
Describe the internal Strengths and Weaknesses of your company and the external Opportunities and Threats for your company. In addition, it is possible to do so by a confrontation mix against the strengths, weaknesses, opportunities and threats against each other and to prioritize them strategically.
1. The Factors
Strengths: What are the Strengths of the company or the concept? Strength is about internal (company) Strength. List them. Maybe it is innovativeness, very good service, or having a great brand, easy to use user interfaces of great online concepts, stellar logistics or even good management or leadership. Select the top 5 with the most impact and strongest factor.
Then go to Weaknesses: Weaknesses are about internal (organization) Weaknesses. What are the Weaknesses of the company. List them. Maybe its a poor salesforce, a slow IT department, slow bureaucracy or poor management, or no real customer focus (to much inwards looking). Select the top 5 with the most impact.
Then move to Opportunities: What are market or external Opportunities? Maybe a new target group develops (new generation of consumers), or a new technology adoption (say for example solar sustainable technologies), or a new distribution concept (direct distribution for example direct online selling), drones for agriculture (which helps mapping and crop yield management). List lots of opportunities, keep them as a separate list, then select the best 5 you could image with the highest impact.
Then go to Threats: What could be external Threats: think of competitors maybe from other industries or countries, you didn’t know. (For example: Alibaba vs Amazon). Maybe it could be a hostile takeover, Maybe you have an old business model that is decaying in this digital age. Or things you didn’t know, like pandemics.Think of trends that might impact the organization negatively (otherwise this is an Opportunity). While creating this look to the future. (so you need to be aware of the trends and business environment).
What are the strengths of your company? Focus on answering this question on the internal aspects of your company.
What are the weaknesses of your company? Focus on answering this question on the internal aspects of your company.
What are the opportunities for your company in the future? Focus on answering this question for external factors that influence your company.
What are the threats to your company in the future? Focus on answering this question on the external factors that influence your company.
2. Put the Combination in a Table
Now you have 5 Strengths, 5 Weaknesses (internal) and 5 Opportunities and 5 Threats (external). Put them in a 4×4 rows and columns table. Cross reference them. Say combine Strength with Opportunities, for example: great IT management (internal Strength) and new solar technologies (external Opportunity). This yields a strong opportunity which your company might really deliver successfully on.
Also combine Weakness with Threats: say poor management and strong competition. It could be then likely (in the longer term) that your company could be ready for a takeover. Go on combining Strength with Opportunities and the other elements,
So you have 4 quadrants now. Here it get a bit harder. It hard now to select the most important ones. Do this in addition with others (they have different viewpoints and come up with a different list, so you need communication here). Then pick the top 2 of each quadrant with the most impact.
These are your Issues to work on. Sure there a lot more of them here, but selecting them is hard, but needed. Leave the concept list as list available for later. So you do have the list, but also the top Issue list, you’ll address in your plan.
3. Select the Major Issues
Then try to get to 5 major Issues. Now you have the Issues to address in your business approach. The rest of the approach should try to tackle these Issues. Say, you need more logistics, or more service, new junior staff to develop online presence, improved working with distribution partners, adopt new technology and better monetize on this and so on. It will be specific for your situation.
The Issues and the SWOT analysis are in the plan before Goals and Targets. This is needed as the Issue list is the high level element you try to fix in your business approach. Your plan should then create an operational action plan to fix these issues.
4. Discuss with peers
That’s it. You see SWOT analysis gets you thinking ahead and it helps to create an improved structure in your approach for your plan. However it could be a bit arbitrary, so join forces with your colleagues and peers and discuss the SWOT quadrant and Issues with them. This will create support for later of the realization of the action plan as well. (thus facilitating and helping execution later).
5. Map it in a Table and create it on 1 A4 page
Also SWOT analysis change in time (as markets, segments, technology, business environment, opportunities change in time, so update them yearly). Feature this Analysis as a 1 page A4 in your year plan, and use a table for it, this reads better.
Thats it!. Good luck making a SWOT analysis for your business!