If you’ve been involved in planning a company’s strategy, you’ve likely done a SWOT analysis. This analysis is a great tool for entrepreneurs and small business owners to shape their marketing and sales strategies.
In this blog, we will learn SWOT analysis, see examples, and get tips and strategies for conducting an effective SWOT analysis.
What is a SWOT analysis?
A SWOT analysis is a strategic action planning tool that can be used to evaluate the Strengths, Weaknesses, Opportunities, and Threats that can impact situations in your professional and personal life.
Analyzing a situation helps you make decisions and prepare for potential challenges. A SWOT analysis uses a grid with four sections. Each section focuses on the strengths, weaknesses, opportunities, and threats related to the topic.
Businesses need to examine the market demands, opportunities, and threats. A SWOT analysis helps them stay aware of both internal and external factors that affect their success.
This type of analysis is a simple way to determine the positive and negative aspects of any situation. It encourages employees to think critically and identify any obstacles that need to be addressed. It also helps outline the steps needed to achieve short—and long-term goals.
Component of SWOT Analysis
The idea is to create a great strategy by understanding your Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T). It’s not just about making a list but actually discovering meaningful elements that will help you grow. Pay attention to the following factors:
A SWOT analysis covers four main categories: Strengths, Weaknesses, Opportunities, and Threats. While the details within each category will differ from company to company, every SWOT analysis needs to cover these areas to be effective:
- Strengths: What are you good at?
- Weaknesses: What areas need improvement?
- Opportunities: What external factors can you take advantage of?
- Threats: What external risks could harm you?
The purpose of this analysis is to help create a well-rounded strategy by understanding where you excel, where you struggle, what possibilities exist, and what risks may arise.
Internal Factors: Strengths and Weaknesses
Strengths and Weaknesses are internal factors that represent things you can control. These include:
- Financial resources like funding, income sources, investments, etc.
- Physical resources such as location, equipment, facilities, etc.
- Human resources like employees, volunteers, target audience, etc.
- Intellectual property like trademarks, patents, etc.
- Operational processes such as employee programs, systems, etc.
1. Strengths
Strengths reflect what your organization does well. This includes your competitive advantages, positive stakeholder contributions, and tangible assets like existing customers, financial resources, and a strong distribution network. Strengths build your competitive edge and are key to your success.
For example, in the “Strengths” category it questions the following:
- What new business have we won this year?
- What were the reasons for obtaining these deals?
- What is our competitive advantage?
2. Weaknesses
Weaknesses are areas where you could improve or things that hold you back. These might include a lack of expertise, limited financial support, outdated technology, or poor location. Recognizing weaknesses is important to ensure you can address them and compete more effectively.
And in the “Weaknesses” category, ask yourself questions like:
- What businesses have been lost this year?
- What were the reasons why those businesses were lost?
External Factors: Opportunities and Threats
Opportunities and Threats come from external forces that influence your business but are often beyond your control. Examples include:
- Market trends such as new products, changing customer needs
- Economic trends like financial shifts
- Demographics
- Supplier and partner relationships
- Regulations such as political, environmental, or economic
3. Opportunities
Opportunities are the external chances you can seize to increase profits or grow your business. These could include market growth, shifts in customer perception, or new technological advancements. The key is identifying whether the opportunity fits your strategy and whether you can act on it within a specific timeframe.
4. Threats
Threats are external factors that could harm your business. Competitors, changes in government policies, negative media coverage, or evolving customer behaviors can all pose risks. Understanding these threats is crucial for planning how to mitigate their impact.
Advantages of Performing a SWOT Analysis
If you’re a marketer or a small business owner, you might wonder if a SWOT analysis is useful or even practical for smaller companies. While it requires effort, the benefits make it worthwhile, even for small businesses.
Here are some key advantages of conducting a SWOT analysis:
- It can be done in-house, so there’s no extra cost involved.
- It provides a clear summary of your business strategies.
- It helps you assess both internal strengths and weaknesses as well as external opportunities and threats.
- It uncovers the company’s weaknesses that you might not have noticed without this kind of deep evaluation.
When Should You Do a SWOT Analysis?
A SWOT analysis is great for developing a marketing strategy, but since strategies take time to implement and show results, it’s not something you should do too often. Constantly changing your focus can disrupt your business’s position in the market.
When done properly, a SWOT analysis helps guide your long-term business strategy. The insights gained often lead to major decisions, like launching new products, shifting business focus, or developing an innovation plan.
Because of the impact these decisions can have, it’s better to focus on doing a thorough analysis rather than conducting frequent ones. However, certain events may call for a new SWOT analysis, which can help you adapt and adjust your strategy accordingly, such as:
- Changes in competition
- New technologies that affect your market position
- A big drop in production costs
- New regulations or rules impacting your industry
How to Create Your Own SWOT Analysis?
When conducting a SWOT analysis with your team, it is important to avoid discussing the issue in a complaint session. Instead, focus on creating meaningful insights based on real experiences from the past year.
To give your analysis context, ensure each part of the SWOT analysis comes from thoughtful answers to specific questions. This will help guide your business toward its next steps rather than just listing general points.
Here’s how you can start:
1. Analyze Your Strengths
Ask yourself:
- In which areas does our company excel?
- What important deals or projects have we won this year, and why?
- Which customer groups or markets have generated the most sales and profits?
- What have we done best this year? What were our biggest achievements?
- Which customer segments or markets saw the most growth? What drove this success?
2. Examine Your Weaknesses
Consider:
- What important deals or bids did we lose this year, and why?
- Which customer groups or markets brought in the least sales and profits?
- What were our biggest disappointments or failures?
- Which segments made the least profit, and what caused this outcome?
- Where are the pain points regarding customer needs, trends, or wants?
3. Identify Opportunities
Look for:
- What new customer needs can we address?
- What economic trends benefit us, and how can we take advantage of them?
- Are there technological advancements that are creating new opportunities for us?
- What opportunities have our competitors overlooked?
- What other options do our ideal clients have, and how can we stand out?
- Are there major changes happening in our industry that we can leverage?
4. Assess Threats
Ask:
- Are there new technological factors that pose risks to our business?
- How do our competitors threaten us?
- What concerns us most about the future of our company?
- Are any significant changes happening in the industry that could harm us?
- Are there any government regulations that are becoming more burdensome?
Answering these types of questions will give you clearer insights into how to grow, improve, and protect your business.
How to Perform a SWOT Analysis for a Business Plan?
When creating a business plan, you’ll need to consider two types of factors: internal and external. Internal factors exist within your business, while external factors are outside elements that exist whether your business is around or not.
Here are 5 simple steps to help you carry out a SWOT analysis and create a strategic plan:
1. Set a Clear Objective for the SWOT Analysis
Start by defining the main goal of your SWOT analysis. The marketing team should discuss which areas need immediate attention and put that down in writing. For example, if you want to know whether launching a new product line is a good idea, that would be your main objective.
2. Research Your Target Market
To perform a successful SWOT analysis, it’s important to thoroughly understand your market. Research things like competitors, customer service trends, and technology to gather useful insights.
3. Gather Internal and External Factors
Here’s how to assess the different aspects of your business:
- Identify Strengths: List what your business does well. This could include aspects like skilled employees, a great location, or high product quality.
- Identify Weaknesses: Recognize areas where your business needs improvement. Write down things that might be damaging your reputation, like a shrinking client base or staff shortages.
- Identify Opportunities: Look for external factors that could help your business grow. Just be cautious. Sometimes, what looks like an opportunity can also pose risks if competitors are doing something similar but better.
- Identify Threats: Write down external factors that could harm your business, such as rising competition or an unstable market.
This planning process can be done using sticky notes or whiteboards. It encourages everyone to share ideas without worrying about the right or wrong answers.
4. Prioritize the Factors from Your SWOT Analysis
Once you’ve compiled your strengths, weaknesses, opportunities, and threats, organize them in a SWOT matrix. This side-by-side comparison helps you visualize the big picture.
Then, ask yourself key questions to determine which factors need immediate attention:
- Can your strengths help you take advantage of opportunities?
- Can your strengths protect you from threats?
- How can you address your weaknesses so they don’t stop you from seizing opportunities?
- What steps can you take to reduce weaknesses and mitigate threats?
5. Develop a Strategy to Address the Issues
Your marketing team can start building strategies after organizing your findings in the SWOT matrix and answering the key questions. These strategies should focus on leveraging strengths, improving weaknesses, capitalizing on opportunities, and defending against threats to help the business reach its goals.
How to Involve Customers in Decision-Making?
Organizations often rely on customer satisfaction surveys or other data they’ve collected during their market planning. Typically, companies take existing research meant for other purposes and use it to inform decision-making. However, this may not be the most effective approach.
A better way to involve customers in your decision-making process is to create new, focused surveys that gather specific insights to guide your strategy and marketing plans. Here’s how you can do it:
- Start with a Customer List: Build a list of customers and their emails as the foundation. Add custom fields like industry, customer type, and products purchased to give more context.
- Conduct Qualitative Research: Ask open-ended questions to understand what matters most to your customers when they choose your product or service. Follow up with specific attributes that influence their buying decisions.
- Survey Customers About Your Strengths: Create short surveys asking customers to evaluate your strengths. List traits like “high technology,” “friendly staff,” or “good price,” and have them answer Yes/No (or N/A). Avoid combining similar traits like “friendly staff” and “customer service” as they refer to different things. Also, include areas where you’re unsure or think you might be weak to see if customers agree.
- Ask About External Influences: Since opportunities and threats are part of a SWOT analysis, ask customers how these external factors affect them. Are the opportunities and threats you see similar to theirs, or do they have different perspectives?
- Tailor Surveys to Upcoming Decisions: Create surveys that focus on the decisions you’ll make as part of your marketing plan. Instead of reusing old survey data, gather fresh customer input to ensure they are actively involved in shaping your business decisions. This creates a more collaborative marketing approach.
SWOT Analysis Survey Example with Questions
A SWOT analysis focuses on questions that can be asked for each part of the SWOT framework (Strengths, Weaknesses, Opportunities, and Threats) to evaluate the launch of a new mobile variant. Here’s a SWOT analysis example of a fictional company, ABC Electronics.
Strengths
- What are your company’s most valuable assets?
- How do your products or services stand out from competitors?
- What is your unique selling point?
- How effective and skilled is your team?
- What feedback do your current customers give about their experience with your company?
Weaknesses
- What areas of your business need improvement?
- Are there any parts of your business that competitors could take advantage of?
- Do you lack technical expertise in certain areas?
- Is your business making enough revenue?
- How well do your competitors keep up with market trends compared to you?
Opportunities
- What trends could create new opportunities for your business?
- How might these trends benefit the market as a whole?
- What gaps currently exist in the market?
- Are your competitors struggling to meet customer needs? If so, can you target those customers?
Threats
- Are there competitors that could threaten your business?
- What obstacles are you currently facing?
- Do your products or services comply with all regulations?
- Do you anticipate any changes in government laws that could affect your business?
- Do you think your target audience’s preferences may shift soon?
By asking these questions, ABC Electronics can gain valuable insights for strategic planning. The specific questions and factors will vary depending on the company’s industry, market conditions, and goals.
Tips for Completing a Successful SWOT Analysis
A SWOT analysis helps you evaluate both the internal factors (strengths and weaknesses) and external factors (opportunities and threats) that could affect your business. Once you’ve completed the analysis, it’s important to review the results and take action.
Here are some tips to make sure your SWOT analysis is effective:
- Keep it simple but detailed: Your analysis should be clear and concise. For example, if your staff is a strength, mention specific employees, their skills, and how they contribute to achieving your business goals.
- Get input from different perspectives: Involve employees, suppliers, customers, and partners in the process. Look at online reviews and feedback to get a well-rounded view of your business.
- Don’t make the focus too narrow: While you can conduct a SWOT analysis for specific goals (like increasing customers in the next quarter), it’s also valuable to do an overall SWOT analysis for your entire business.
- Connect it to your business plan: When reviewing the SWOT findings, refer back to the goals and objectives in your business plan. This ensures your analysis aligns with your larger strategy.
- Document your findings: Record the results of your SWOT analysis in your business plan so you can track progress and take action as needed.
Conclusion
Conducting a comprehensive SWOT analysis gives you a valuable view of different aspects of your company. It’s a straightforward process that doesn’t require extensive preparation. You can easily spot issues in your projects or daily operations and analyze them.
A good SWOT analysis helps you gain a comprehensive view of your business or project and understand its position in the market. It enables you to develop effective strategies to explore new opportunities or enhance existing ones and to anticipate potential threats.
QuestionPro offers a free SWOT analysis template that can be incredibly useful for evaluating your organization. This template provides a structured approach to assessing your business’s strengths, weaknesses, opportunities, and threats.
With the QuestionPro SWOT analysis template, you can:
- Gather valuable information through various market research methods, such as surveys, interviews, and data analysis.
- Customize the template to fit your specific industry and market.
- Utilize Pre-Built customizable questions for each SWOT analysis category.
It’s important to remember that every organization is unique, so customizing the SWOT analysis template to fit your specific needs is crucial. The QuestionPro SWOT template provides a robust set of tools to help you collect, analyze, and share data effectively.
By using QuestionPro’s free SWOT analysis template, you’ll be able to gain a clear, organized view of your business environment and make informed decisions to enhance your market position. Good luck with your analysis!
