By Essie Bester
As the owner of a small-business enterprise you may be wondering whether a SWOT analysis would be practical or even feasible for your smaller organisation. Experts say that, although there will be overhead costs attached to a comprehensive SWOT analysis, it also holds many benefits even for the smallest undertakings.
It offers you a unique opportunity to get better insight into the functioning of your business and could contribute to a wider perspective of your business and its position in the industry.
An additional advantage of SWOT analyses is that this technique can be applied to a wide range of scenarios. You can use SWOT analyses to assess potential strengths and weaknesses of an upcoming publicity campaign or a planned content project, or it could even be used to determine whether your undertaking should be represented at a trade show or industry event.
A SWOT analysis allows you to identify what your undertaking does well, where it could improve and highlights opportunities and threats facing your undertaking. Over and above the opportunity to identify these factors, it also allows you to develop and implement tangible charts and timelines for potential solutions. It could be of help in the compilation of budget plans, the identification of other needs as well as strategic middle- and long-term planning.
For the most comprehensive results a SWOT analysis must be done by a group of people with different perspectives and interests in your undertaking. Management, client services and even clients can contribute valid insights.
A SWOT matrix is usually presented as a square divided into four quadrants. Each quadrant represents one element of the SWOT analysis, viz. strengths, weaknesses, opportunities and threats.
Start with a brainstorming session at which the key points of each of the four categories are identified. After the brainstorming session you can create a final prioritised version of your SWOT analysis. List the factors in each category starting with the highest priority to the lowest priority.
Here are a few questions (there are others) that can help you to develop each section of your SWOT analysis.
- Strengths (internal, positive factors: These describe your organisation’s internal positive properties, tangible and intangible, that are under your control.
What can you do well?
What internal sources do you have? Think of the following: Positive properties of people, such as knowledge, background, training, credentials, network, reputation or skills.
Tangible assets of the company, such as capital, credit, current clients or distribution channels, patents or technology.
What advantages do you have over your competition?
Do you have a strong research and development capacity? Manufacturing facilities?
What other positive aspects (internal) add value or give you a competitive advantage?
- Weaknesses (internal, negative factors): These are aspects of your business that detract from the value you offer, or that can harm your competitiveness. You must improve these areas in order to compete with your best competitor.
Which factors under your control are harming your capability to get or maintain a competitive advantage?
Which areas must be improved for you to achieve your goals or compete with your strongest competitor?
What is missing from your business (e.g. expertise or access to skills or technology)?
Does your business have limited resources?
Is your business’s location a problem?
- Opportunities (external, positive factors): Geleenthede (eksterne, positiewe faktore): These are external, attractive factors and the reasons why your business will probably flourish.
What opportunities are there in your market or in the neighbourhood from which you can benefit?
Is the perception of your business positive?
Has there been growth in the market recently or are there other changes in the market that present an opportunity?
Is it a long-term opportunity or does it only have a time slot? In other words, how critical is your timing?
- Threats (external, negative factors): These are external factors that could endanger your strategy or the undertaking itself. You have no control over it, but it would be to your advantage to have contingency plans ready so that you can address them when they appear.
Who are your current or potential competitors?
Which factors out of your control could endanger your undertaking?
Are there any challenges that are created by an unfavourable trend or development that could lead to declining income or profits?
Which situations could pose a threat to your marketing efforts?
Has there been a significant change in suppliers’ prices or the availability of raw materials?
What about changes in consumer behaviour, the economy or government regulations that could make your sales go down?
Has a new product or technology been introduced that could make your products, equipment or services look obsolete?
The development of strategies from your SWOT analysis
The real value of this exercise lies in using the results to increase the positive influences on your business and decreasing the negative ones.
Look at how the strengths and weaknesses, opportunities and threats of your undertaking overlap each other.
Look at the strengths you have identified and then devise ways to use them to grow the opportunities. Then consider how the same strengths can be used to lessen the same threats you have identified.
Continue the same process by using the opportunities you have identified to develop strategies to decrease the weaknesses or avoid the threats.
After you have developed strategies and included them in your strategic plan, you must make sure that you schedule regular reviewing meetings. Use these meetings for discussing why the results of your strategies differ from what was initially planned (because they will always differ) and decide what your team is going to do about it.