SWOT Analysis
A business can be evaluated and steps taken to initiate growth from a SWOT analysis that is completed in a professional and thorough manner. The SWOT analysis technique is a time tested and proven method for allowing a business to take a good look at where they are today with an eye on where it wants to be in the future. First of all what is a SWOT analysis?
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- Strengths – all businesses have certain strengths that must be understood and capitalized on if success is going to be reached.
- Weaknesses – there is not a business out there that does not have certain weaknesses (limitations is perhaps a better word).
- Opportunities – the ability to recognize opportunities for increased sales, market share, customer service improvement and other critical factors will benefit every business.
- Threats – businesses face threats in the form of legal liabilities, competition, market conditions, key employee issues, and owner illness or incapacity.
A thorough and professionally done SWOT analysis will allow for the business owner to get a fresh look at where the business is at the present time. A clear path for future goal setting and business improvement will be devised from this analysis. Many business owners will utilize the SWOT analysis as a way to make decisions regarding day to day and month to month planning. The SWOT analysis is a relatively short document that provides a snap shot of what needs to be done to accomplish organizational goals.
Strengths are areas of the business that set it apart from the competition. These are those areas where the business excels as far as performance is concerned. For example, a financial service business may stand out from the competition due to its ability to maintain great customer relationships. The customer service efforts of the company can be identified as special and unique to this business. The customer retention levels are measured as better than the competition. The business would be wise to utilize this strength to attract more customers and receive more referrals.
Weaknesses exist in every company. Limitations is a better word to use here as a business can not be all things to all people. For example, a small auto parts store may not be able to match a larger auto parts store in terms of marketing dollars to spend. The recognition of a limitation (weakness) like this will force the small auto parts dealer to make different marketing decisions that are consistent with the budget allowed and scope of the market being targeted.
Where are we going?
Opportunities exist for growth and improvement at all times. For example, an accounting firm may recognize that more medium and small businesses are being created in the area as the economy starts to improve. The ability to recognize this new market will allow the accounting firm to initiate marketing efforts at developing relationships with these new business owners.
Threats – a business owner faces threats at all times that must be recognized and steps taken to eliminate or at least minimize them. For example, a heating and air conditioning business with three co-owners is challenged if one of the three owners decides to leave the business or is incapacitated due to illness or injury. Once recognized, steps can be initiated to reduce the risk to the remaining owners if one of the owners exits the business or becomes incapacitated.
LDG Consulting is a leadership development company dedicated to helping businesses achieve improved results. Visit www.resultswithldg.com to learn more.