SWOT Analysis: What It Is and When to Use It

You should regularly assess your processes to make sure you are working as efficiently as possible if you want to run a successful business. You can stay current in a business environment that is constantly changing by evaluating whether your current strategies and plans are still the best course of action. By doing this, you can stay at the top of your customers’ minds and beat out the competition.

Although there are many ways to evaluate your business, a SWOT analysis is one of the best. Learn all about this approach below.

A SWOT analysis is what?

An analysis of your company’s strengths, weaknesses, opportunities, and threats, or SWOT, is a planning procedure that aids in overcoming obstacles and identifying potential new business opportunities.

A SWOT analysis’ main goal is to assist organizations in fully understanding all the variables that go into choosing a course of action.  This method was developed in the 1960s by Stanford Research Institute’s Albert Humphrey as part of an investigation into the causes of corporate planning failures. Since its inception, the SWOT analysis has emerged as one of the most valuable resources for business owners looking to launch and expand their enterprises.

According to Bonnie Taylor, chief marketing officer at CCS Innovations, “it is impossible to accurately map out a small business’s future without first evaluating it from all angles, which includes an exhaustive look at all internal and external resources and threats.” A SWOT analysis accomplishes this in four simple steps that even inexperienced business owners can comprehend and adopt.

When should you perform a SWOT analysis?

Use a SWOT analysis before you decide to take any corporate action, whether it’s investigating new projects, updating internal procedures, looking for opportunities to pivot, or changing a plan midway through its execution. Sometimes it’s wise to perform a general SWOT analysis to check on the current landscape of your business and improve operations as needed. The analysis can show you key areas where your organization is performing optimally and areas where operations need adjustment.

Avoid thinking casually about your company’s operations in the mistaken belief that everything will work out on its own. You can get a complete picture of your company if you take the time to create a formal SWOT analysis. From there, you can figure out how to strengthen or get rid of your company’s weaknesses while maximizing its strengths.

A SWOT analysis should undoubtedly involve the business owner, but it is frequently beneficial to involve other team members as well. Ask for input from a variety of team members and openly discuss any contributions made. You will be able to analyze your company effectively from all angles thanks to the team’s collective knowledge.