Every business organization out there aims to be the best at their game. To achieve this aim of theirs, they keep regular checks and analyse the working of their organization. One such method that they use to do so is the SWOT analysis.
The SWOT analysis method was developed in the 1960s and 1970s during the course of a research project in Stanford University. Data was collected from top companies worldwide to develop and test this method.
Today, companies across the globe use SWOT analysis in the preliminary stages of decision-making. It has proven to be very helpful and profitable.
Do you own and run a business? Is your organization aiming to increase its business returns in 2021? Are you looking for a way to improve its working strategy? Then look no further, because SWOT analysis is your way to go.
Here are a few things that you should know about this method and a step-by-step procedure to do it right so you can gain the maximum benefit out of it.
What is SWOT analysis?
So let’s start from the basic meaning of the term SWOT.
SWOT stands for Strength, Weakness, Opportunities and Threats. The four of these factors tend to affect the functioning of your business in some or the other way.
You’ll earn profits in the spheres that are your strength and suffer a loss in the parts that the business is weak in.
You may gain good standing in the market if you utilize opportunities that come your way. You’ll keep your business safe if you dodge the threats that are out there in the market. It is that simple.
Throughout the process of this analysis, you will be asking questions regarding these four factors to learn where your company is standing. Here is a sample of questions asked during the SWOT analysis process.
- What are your strengths?
- Where do you earn the most profit from?
- What resources do you possess that are unique to your organisation?
- How easy is it to use this strength for profits in the market?
- Where does your organisation need to improve?
- Are there any resources that you need to stock up on?
- Is there a gap in communication between the departments?
- What are the new trends out there in the market?
- Are these trends worth investing money in?
- Are there any new regulations that the government may put forth?
- Do you have any new competitors in the market?
- Is your technology becoming obsolete?
- Are there any new trends that could harm your business?
- Is the taste and preference of your consumers changing?
Analysis of these four factors will help you gain a good idea of where your business is currently standing and what will help you take it to the next level.
How to do SWOT Analysis right
Your answers to the above-mentioned questions will only be useful if you gain them from proper sources and utilize them in an effective manner. Here is a step-by-step guide for you to help you through the entire SWOT process and gain the maximum benefit that you can out of it.
Analyze as a group
No matter how engaged and passionate you are about your business, you probably do not know everything that is going on inside of it.
There may always be strengths you don’t even know about or threats you just don’t see coming. This is why analysing as a group in the preliminary stage of decision-making is essential.
Say you have a production department, a finance department and a marketing department in your business. You need to have at least one representative from each of these departments to make sure you get the entire picture.
Trust me, the opinions, suggestions and perspectives that your team has to offer will do wonders for your business.
Obviously, when it comes to being part of drafting a plan, nobody’s going to have a ready-made idea of what you’re supposed to do. So don’t rush the process. Give your team the chance to brainstorm.
In my personal opinion, brainstorming can be divided into 2 phases. The first one is private brainstorming. Let the representatives from each department talk to their subordinates about what they think is good and what they think the organization should improve upon.
The second phase is to talk and discuss about it as a group. Let each individual give their status report and opinion. This will not only help you be more efficient in the process, but it will make sure that you’ve got all the sides covered.
Prioritizing ideas from the SWOT analysis
What may seem like a strength to me may not always seem like a strength to you.
Once you’ve gotten the opinions and perspectives of all your representatives, choose the options that are of greater priority to the business as a whole. Rank them on the basis of their importance to the organization.
Generally, just picking the top 3 strengths, weaknesses, opportunities and threats would give you enough to work with. This will help you have a clear view of all the components hence making it easier to draft a plan.
Don’t forget the quadrants!
After you prioritize the ideas that are important for your business, try to arrive at parallels between them.
Say, one of the strengths of your company is using a particular resource efficiently. You could try looking for opportunities with that particular resource. This way, as a business organization, you may gain profits by playing to your strengths.
If you’re gutsy enough, you could even try to carve an opportunity out of your own strength. Take that risk if you want to. It could turn out worth the worry and effort.
This kind of parallel could be drawn between any of the four factors. These connections could actually prove to be very beneficial to your organisation as a whole.
Take action according to the SWOT Analysis
Last but not the least, form the actual plan and take action!
No plan is ever going to be of any good if you don’t stand by it and apply it effectively in the functioning. Make sure you monitor the working of your team. This will ensure that you have a good idea of how things are going.
If something seems to be going out of hand, do not hesitate to intervene. That step could make all the difference.
Here’s hoping that this helped you gain a bit more insight into the application of SWOT analysis and how much of a benefit it could be to your organization!
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