IDENTIFYING YOUR STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS
A SWOT analysis is a simple and effective tool that can assist in developing your business strategy, whether you’re building a maize milling startup, or growing an existing business.
WHAT IS A SWOT ANALYSIS?
SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
- Strengths and weaknesses are internal to your business — These are things you can control and change to a certain degree. For example: your employees, your patents and intellectual property, and your business location.
- Opportunities and threats are external — Things that are happening in the larger market. You can take advantage of opportunities and protect against threats, but you cannot change them. Examples include competitors, prices of raw materials, and customer shopping trends.
A SWOT analysis organises your top strengths, weaknesses, opportunities, and threats into an organised list and is usually presented in a simple two-by-two grid.
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HANDY RESOURCES ON WRITING YOUR BUSINESS PLAN
Business plan do’s and don’ts can get very confusing, so we have compiled a hub with useful information, tips and guides to help you write yoursLEARN MORE
HOW TO DO A SWOT ANALYSIS
- Get a group of people together with different perspectives and roles in your business. Management, sales, customer service and customers can all give you valid insights.
- Either hold a brainstorm together to discuss the four categories, or get everyone to complete a SWOT analysis template individually and then meet to discuss the results.
- You can use a SWOT analysis template (which you can download for free) or make lists. Use whatever makes it easiest for you to understand and organise the results.
- Start with bullet points – you can elaborate later. Just start by capturing the factors you believe are relevant in each of the four areas.
- Create a final version of your SWOT analysis. List the factors in each category in order of highest priority at the top to lowest priority at the bottom.
SAMPLE QUESTIONS TO ASK DURING A SWOT ANALYSIS
STRENGTHS (INTERNAL, POSITIVE FACTORS)
- What do you do well?
- What internal resources do you have?
Tangible assets of the company, such as capital, credit, existing customers or distribution channels, patents or technology.
- What advantages do you have over your competition?
- What other positive aspects, internal to your business, add value or offer you a competitive advantage?
WEAKNESSES (INTERNAL, NEGATIVE FACTORS)
- What factors within your control keep you from obtaining or maintaining a competitive edge?
- What areas need improvement to achieve your objectives or compete with your strongest competitor?
- What does your business lack?
- Does your business have limited resources?
- Is your business in a poor location?
OPPORTUNITIES (EXTERNAL, POSITIVE FACTORS)
- What opportunities in your market or the environment can you benefit from?
- Is the perception of your business positive?
- Has there been recent market growth or other changes in the market that create an opportunity?
- Is this opportunity ongoing, or does it have limited scope? In other words, how critical is the timing?
THREATS (EXTERNAL, NEGATIVE FACTORS)
- Who are your existing or potential competitors?
- What factors beyond your control could place your business at risk?
- What situations might threaten your marketing efforts?
- Has there been a significant change in supplier prices or the availability of raw materials?
- Are there shifts in consumer behaviour, the economy, or government regulations that could reduce your sales?
Doing a SWOT analysis is a surefire way to identify where your business strategy should be headed. Good luck!