SWOT Analysis, Discover new opportunities.
SWOT Analysis, Discover new opportunities.
Article by Taalib
Strength, weakness, opportunities and Threats, sounds simple isn’t it? Yes it is. SWOT analysis has long been used, by marketing analysts with different formulations or names use to the perfection to predict the perfect strategic plan. How it helps? SWOT analysis is very helpful to determine your strengths, weakness in the meantime, identifying both the opportunities to open or the threats that could possibly arise. Whether in business or in personal context, a well devised SWOT analysis helps to crave a sustainable niche in your market. And if we do it in personal context, it will greatly help your career so that you get the best mileage from your talent, abilities and opportunities. Business SWOT AnalysisSo why does everybody talk about SWOT? SWOT is particularly powerful because with little thought, it can help you uncover the opportunities that you are well organized, prepared and placed to exploit. And with little understanding of weakness, you can easily manage and eliminate threats that would catch you unawares. And yes you can come up with a better SWOT Strategy just by looking at your competitor’s SWOT framework. , you can start to craft a strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your market.
How to Use SWOT AnalysisOriginated by Albert S Humphrey in 60′s has been most critical, simple and yet powerful framework for any business for perfect strategic planning. There are two ways to use it, either you can use it simple icebreaker helping people to kick start the strategy formulation or in other words “a very detailed and sophisticated serious strategy tool. Tip:Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix.Strengths:• What advantages does your organization have?• What do you do better than anyone else?• What unique or lowest-cost resources can you draw upon that others can’t?• What do people in your market see as your strengths?• What factors mean that you “get the sale”?• What is your organization’s Unique Selling Proposition (USP)?Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market.You should also be realistic – it’s far too easy to fall prey to “not invented here syndrome.” Also, if you’re having any difficulty with this, try writing down a list of your organization’s characteristics. Some of these will hopefully be strengths!When looking at your strengths, think about them in relation to your competitors. For example, if all of your competitors provide high quality products, then a high quality production process is not strength in your organization’s market, it’s a necessity.Weaknesses:• What could you improve?• What should you avoid?• What are people in your market likely to see as weaknesses?• What factors lose you sales?Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you don’t see? Are your competitors doing any better than you?It’s best to be realistic now, and face any unpleasant truths as soon as possible.Opportunities:• What good opportunities can you spot?• What interesting trends are you aware of?Useful opportunities can come from such things as:• Changes in technology and markets on both a broad and narrow scale.• Changes in government policy related to your field.• Changes in social patterns, population profiles, lifestyle changes, and so on.• Local events.Tip:A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.Threats• What obstacles do you face?• What are your competitors doing?• Are quality standards or specifications for your job, products or services changing?• Is changing technology threatening your position?• Do you have bad debt or cash-flow problems?• Could any of your weaknesses seriously threaten your business?Tip:When looking at opportunities and threats, PEST Analysis can help to ensure that you don’t overlook external factors, such as new government regulations, or technological changes in your industry.Further SWOT TipsIf you’re using SWOT Analysis as a serious tool (rather than as a casual “warm up” for strategy formulation), make sure you’re rigorous in the way you apply it:• Only accept precise, verifiable statements (“Cost advantage of US/ton in sourcing raw material x”, rather than “Good value for money”).• Ruthlessly prune long lists of factors, and prioritize them, so that you spend your time thinking about the most significant factors.• Make sure that options generated are carried through to later stages in the strategy formation process.• Apply it at the right level – for example, you might need to apply SWOT Analysis at product or product-line level, rather than at the much vaguer whole company level.• Use it in conjunction with other strategy tools (for example, USP Analysis andCore Competence Analysis) so that you get a comprehensive picture of the situation you’re dealing with.
Example SWOT AnalysisA start-up small consultancy business might draw up the following SWOT Analysis:Strengths:• We are able to respond very quickly as we have no red tape, and no need for higher management approval.• We are able to give really good customer care, as the current small amount of work means we have plenty of time to devote to customers.• Our lead consultant has strong reputation in the market.• We can change direction quickly if we find that our marketing is not working.• We have low overheads, so we can offer good value to customers.Weaknesses:• Our company has little market presence or reputation.• We have a small staff, with a shallow skills base in many areas.• We are vulnerable to vital staff being sick, and leaving.• Our cash flow will be unreliable in the early stages.Opportunities:• Our business sector is expanding, with many future opportunities for success.• Local government wants to encourage local businesses.• Our competitors may be slow to adopt new technologies.Threats:• Developments in technology may change this market beyond our ability to adapt.• A small change in the focus of a large competitor might wipe out any market position we achieve.Once SWOT is analyzed, implementation is the next and equally important process for any strategic plan. Personally I have seen so many plans resting on the shelves for rest of their life, never implemented. Once you have determined everything as your business plan, you should be equally determined to make them work for you. ?
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