SWOT Analysis is a strategy planning method. This is an analysis of four groups of factors affecting your company: Strengths, Weaknesses, Opportunities and Threats.
SWOT analysis consists of two stages. It’s not as simple as CasinoChan login, but once you’re there, it may be quite beneficial to your business.
Strengths and Weaknesses are internal factors that can be influenced by order delivery speed, production cost, marketing.
Opportunities and Threats are external factors that do not depend on the company in any way. These include the rise of strong competitors, exchange rate volatility, and technology development.
At the second stage, when the external and internal factors are identified, a Matrix of solutions is formed. It determines what has to be done to avoid possible threats or to gain a significant market share ahead of competition.
SWOT analysis is used to make decisions about the future development of the company.
Details on each of the SWOT analysis groups
1. Identification of Strengths
Strengths are the properties of the product, team and project that give you advantages over others in the market.
It can be a low price, collaboration with powerful people, a high rate of repeat purchases, or a unique production technology, and so on.
You can identify your Strengths by answering the following questions:
- What good attribute do you distinguish from competitors?
- Why do customers choose your product?
- Which channels of attracting customers bring good results and where are you more “present” than your competitors?
- What specific technologies do you use in production and what positive impact does this have on your brand?
- What makes the company grow and make more profit?
2. Identification of Weaknesses
Weaknesses are everything that prevents you from growing or makes you less competitive than others in the market.
Poorly organized delivery, late shippers, data leakage due to unethical personnel, order loss in CRM, are some examples.
You can identify your Weaknesses by answering the following questions:
- What do customers write about in negative reviews, what are they dissatisfied with?
- Where are you significantly worse than your competitors?
- What errors constantly occur in business processes?
- What prevents you from achieving your goals and increasing profits?
3. Search for Opportunities
Opportunities are factors that you cannot influence, but you can benefit if you make the right decisions. These can be political, social, technological factors.
For example, the emergence of new technologies that reduce the cost of production.
In this case, it will be possible to implement technologies faster than competitors.
Situations like this can provide fresh opportunities that will assist take the business forward.
4. Search for Threats
Threats – changes in the external environment that can negatively affect the proper course of work in the company; lead to degradation of customers, deterioration of reputation, decrease in profits.
Consider the economic crisis: it is hard to avoid it, yet it may result in fewer sales as consumers are hesitant to spend more money.
The search for threats is the same as the search for opportunities. Think about what external factors may have a negative impact on your company.
Designing a Solution Matrix
The Solution Matrix contains all the actions you need to take to develop your business.
To fill in the matrix, it is necessary to take into account factors of different groups. As a result, you get four combinations:
- S + O (Strengths + Opportunities) – which Strengths will help realize the Opportunities.
For example, a mattress manufacturer uses environmentally friendly materials. One of the Opportunities is for large chains to abandon middlemen. The company can offer online deliveries right away, as the product has a competitive advantage.
- W + O (Weaknesses + Opportunities) – how Weaknesses can prevent you from taking advantage of Opportunities. In this situation, you should find solutions that cut shortcomings and allow you to realize Opportunities.
In the case of the mattress manufacturer, the refusal of networks from middlemen means a larger volume of supplies. But the company has a low production capacity.
In order not to miss the Opportunity, they should open additional options for selling the mattress.
- S + T – (Strengths + Threats) – how Strengths will help protect yourself from Threats.
When a foreign manufacturer enters, for example, the Russian or European market, the company may lose some of its customers. In this situation, the company has an advantage: it can offer a free test drive of the product.
This marketing solution will help you maintain sales stability.
- W + T (Weaknesses + Threats) – which of the Weaknesses increase the likelihood that Threats will harm the business.
The company has a high production cost for the industry. The threat of a large foreign competitor with a low-cost product entering the market forces steps to be modernized sooner rather than later.
After combining all the Strengths and Weaknesses, Opportunities and Threats, a list of specific solutions is formed that you should do to develop the company or prevent failures in the future.
The solutions found as a result of the analysis should be prioritized and implemented sequentially.