SWOT Analysis: A Comprehensive Guide in 2024

Picture this: you have a business selling handmade products. You think you are doing everything right, but you are not getting the results as expected. Of course, you will want to take a stock of things and try to figure out where things are going wrong. Look no further, SWOT analysis is the tool that you need.

Business and ways to do business are evolving every day, and hence the way you do the business and decision making should also be dynamic. The key to success and staying ahead of the curve is to have a good strategic approach. SWOT analysis is a strategic tool that will help you stay on top of the market trends and even analyse the internal and external factors influencing the business easily.

What is SWOT?

S = Strength

W = Weakness

O = Opportunities

T = Threats

The above four parameters give a clear picture of what is working right for the business, where it is lacking, and how to overcome the difficulties. Let’s get started on understanding the nuances of SWOT analysis.

SWOT analysis is a popular tool that is used by all kinds of businesses, organizations, non-profits, and even small businesses use this analysis tool for their business or a specific project. It is a continuously evolving tool and not a one-time work.

The aim of a good SWOT is to improve your business, and plug in the gaps in all spheres of the business such as marketing, project management, sales, and even personal development.

The Elements of SWOT Analysis

SWOT framework helps fill in the larger picture of where you are and how to move forward. Let’s dive a little deeper into the elements of SWOT analysis:

Strengths

These are the factors that propel your business on the road to success forward. This answers two important questions.

• What are you doing well?
• What is unique about your business that set you apart from the competitors?
• What do customers like about your business?
• What are the core competencies that work for us?
• What resources are available to your business that you can rely on?

Strength in SWOT analysis, is an indication of what is performing well. It includes the unique characteristics of the business, such as resources, capabilities, or skills. It gives an overview of what is already working. For example, in the handmade goods business, your strength can be the quick response and turnover of your products, which sets you apart from the competition.

You can use the techniques that you know will work in the other areas where you are lacking and improve the efficiency of the entire business. Common examples of strength are a loyal consumer base, skilled workforce, a stable brand etc.

Weakness

They are kind of like holes in a boat, restricting its movement. In the SWOT analyses, weakness indicates

• Underperforming initiatives
• What could be improved?
• Inefficiencies, lack of resources, etc.
• Shortcomings such as poor business reviews, high-cost incurrences, or limited product range, etc.
• Ranking against the competitors

This I the next step after identifying the strengths. For example, in the above-mentioned business, the one weakness could be the lack of longevity and lack proper e-commerce establishment. Weaknesses are the ones that hold back the business.

Opportunities

They are akin to finding and winning the oasis in the dessert. This is the third important pillar of SWOT analysis, which comes after strength and weakness analysis. It involves identifying the segments or areas which can be harnessed to employ external initiatives to put your business in a competitive position. Opportunities can come in the form of using the full strength of your resources or improving in weak areas.

Consider the following questions when coming up with opportunities:

• What changes, internal or external, will open new avenues for growth for your organization?
• What resources can reduce the weaknesses?
• What are the competitors offering that you are not?
• Is there an untapped market segment that your business is missing?
• What are the business goals for the near future?

This is the point where you figure out if running more advertisements on social media will give more visibility to your products. Or if your product serves as a useful tool for schools but is not reaching them. SWOT opportunities might come in the form of new technologies, changing customer needs, new market segments, potential collaborations, modified distribution channels, etc.

Threats

These are storms or tsunamis that you should worry about and prepare for. Threats are the areas that can cause problems in the future or are the points of business that are causing problems now. Unlike weaknesses, threats are usually caused by external factors and are not totally under your control. The common examples are changes in government policies, market downturns, pandemics, and introduction of a new competitor, etc.

The following parameters are considered when counting threats

• What changes in the landscape of business can harm your organization?
• What new market trends are expected in future?
• Where are the competitors winning from us?
• How can the threats damage your business (performance or operations)?

How to conduct a SWOT analysis?

SWOT analysis can be highly helpful in all kinds of decision-making processes.  It is not only a handy reference for determining patterns, but it is also a great way to collect information. Here are the simple steps to a successful and straightforward SWOT analysis:

• Collect relevant information: List the internal and external factors, such as resources, competitors, culture, market trends, regulations etc.  Talk to the investors and customers to find out what they like or and what changes they want to see in organization.
• Identify the strengths: These are the internal factors that your competitors envy you for! These can be a particular resource or a skill set, or latest superior technology, etc.
• Identify the weaknesses: Things that are holding you back, such as internal limitations, areas of improvements, inefficient processes, weak markets etc.
• Work out the opportunities: Examine the market trends, and demands that align with the strengths of the organizations. Also list the new technologies, social trends etc that can be used to your advantage. 
• Learn how to negate the threats: Identify the threats to the organizations and plan how will you reduce them. The treats are usually external but can also be disruptions in the supply chain or changes in consumer behaviour.

Once you have done the basic SWOT parameters measurement the next steps are:

• Analyse and prioritize: Prioritize the points that you made on the basis of their future impacts. Invite your team members to discuss the ideas and how to implement them. Use the brainstorming sessions to get the departments all on one page and set the clear intensions for the sessions. Don’t hesitate to be creative.
• Develop strategies: Using the SWOT analysis points, and the results of the sessions, you can develop the strategies to forge a strong brand in the growing market.

SWOT analysis is not a one-time exercise, you will need to regularly monitor the four elements to ensure that the changes and strategies that you implemented are still yielding the relevant results.

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When should you use SWOT analysis?

• When you are planning to implement a new change or launch a product.
• There is a change in the management plans.
• You want to grow the business and streamline the process efficiency.
• It is time to review the business performance.

SWOT analysis is a simple way to sperate your organization form the competition.