Why You Need a SWOT Analysis
(Written by guest contributor Andrew Albritton)
No, it doesn’t have anything to do with armed agents kicking down doors. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and doing a SWOT analysis on your business is an essential step in the process of branding and marketing your product or service. It also helps you come up with business strategies. SWOT analyses help you to identify and capitalize on your strengths, and they can help make you aware of and protect you from your liabilities.
The first step to doing any SWOT analysis is to identify your objective, or reason for doing it in the first place. In this case, let’s say that we want to better market our product to potential affiliates. In considering the four aspects of the SWOT, it can be helpful to consider the following areas of your business:
1. Product – What are you selling?
2. Process – How are you selling it?
3. Customer – To whom are you selling?
4. Distribution – How does the product reach your customer?
5. Finance – What are the prices, costs and investments?
6. Administration – How do you manage all of this?
It’s often useful to map out the answers to these questions in a SWOT diagram. Draw a square with four compartments and label one row Strengths, one row Weaknesses, and one column Opportunities and the other Threats. As you go through the above list, try to use it to think of all of your company’s strengths and weaknesses, without leaving anything out. Notice that these are all internal factors, which means that you have the ability to control them. Doing this will help you realize what you can work on and what you can capitalize on.
Next, fill in the Opportunities and Threats spots. Notice that these are external factors. The end analysis is the same; once they are all listed out, you will spend some time thinking about what you can do to mitigate the threats and seize the opportunities.
Doing a SWOT analysis is a simple way to step back and take an objective look at your business as it exists today. It is a great tool to use to develop a brand, corporate identity, or game plan for what’s next for your company.
