What is a SWOT Analysis?

SWOT analyses are conducted in order to assess how well a business is performing. SWOT is an acronym which stands for strengths, weaknesses, opportunities and threats. These analyses help businesses determine what decisions should be made to ensure future success. They’re very useful in getting companies to do things like avoid threats, correct weaknesses, take advantage of opportunities and build upon the company’s strengths.

The strength part of a SWOT analysis finds out exactly what is going well within the business being analyzed. These strengths are internal factors of a company and are a good indication of why a company has made money. Weaknesses are also an internal factor and identifying your weaknesses is very important. You have to be able to identify a problem within your company before you can even attempt to solve the issue. Being able to see the weaknesses in your business allows you to fix them, help your company become stronger and generate more revenue.

There are many internal factors that are able to affect a business and some types of businesses can have internal factors that others don’t. Internal factors include things such as the quality of your product, effectiveness of your marketing campaign, the amount of money you make, the abilities of your employees and the amount of brand loyalty your customers have. There are also external factors like opportunities and threats that affect businesses. These are things that happen outside of your business and influence the performance of your business. 

External factors are things that aren’t controlled by you and may be completely unavoidable. However, even if you can’t avoid them you are still able to identify them and take complete advantage of the external situation. External threats to your business may include things like new competition, government regulation and innovation. External opportunities include things such as consumers having more disposable income, a growth in demand for your product and new things becoming popular. Just because you’re not in complete control of external factors doesn’t mean that you should not be aware of them.

Overall, SWOT analyses are an important thing to conduct within your business. Being aware of all the factors that affect your company will enable you to make the best decisions possible for your business. These analyses are very ROI positive and can take your business to the next level of success. Always make sure to perform SWOT analyses and ensure that you stay up to date and perform this action on a consistent basis.