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Business 101: Performing a S.W.O.T. Analysis

 


The S.W.O.T analysis helps owners and managers better understand the firm’s capabilities and resources.

By: Josh Druck

Performing a S.W.O.T analysis for your small business is one of the simplest yet most effective tools in gauging a business’s value and overall preparedness for handling the future. A S.W.O.T. analysis consists of scanning your business and brand’s internal and external factors. In the end, this analysis will reveal the company’s advantages and disadvantages, in the current and future competitive market.

The S.W.O.T analysis helps owners and managers better understand the firm’s capabilities and resources. With this new understanding of the firm’s Strengths, Weaknesses, Opportunities, and Threats,  an entrepreneur can make more educated business decisions. With the S.W.O.T. analysis, a manager can create lasting competitive advantages, which will lead to higher profits and better overall positioning in the target market.

Strengths - Strengths can be your business’s capabilities, patents, skills, reputation, and access to resources.

Weaknesses - Weaknesses can be your business’s high costs, lack of resources, or a weak brand name.

Opportunities - Opportunities can be your business’s access to new resources and technologies, availability to new customers, and even a change in law.

Threats - Threats can be your business’s new rivals and a rise in competition with your products. Threats often consist of changes in the external environment, and the emergence of new competition into your target market.

In Conclusion, the S.W.O.T. analysis should help your business to focus and pursue opportunities when they present themselves. Knowing you firm’s threats can also aid in vulnerability testing, while knowing your business’s strengths help you reduce vulnerability. Finally, knowing more about your weaknesses will aid your business in creating a strategic defensive plan to prevent any future downturns and loss of capitol.

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