SWOT Analysis is a powerful technique for understanding your Strengths and Weaknesses, and looking at the Opportunities and Threats you face. It helps you develop your career in a way that takes best advantage of your talents, abilities and opportunities. Used in a business context, it helps you carve a sustainable niche in your market.
What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the weaknesses of yourself (or your business), you can manage and eliminate threats that would otherwise catch you unawares.
By looking at yourself and your competitors using the 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 the SWOT Framework:
To carry out a SWOT Analysis, start by answering the following questions:
- What advantages do you (or your company) have?
- What do you do better than anyone else?
- What unique or lowest-cost resources do you have access to?
- What do people in your market see as your strengths?
- What factors means that you “get the sale”?
In looking at your strengths, it is important that you consider this from an internal perspective, and from the point of view of your customers and people in your market. Be realistic; think about them in relation to your competitors – for example, if all your competitors provide high quality products, then a high quality production is not a strength in the market; it is a necessity.
- 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 do not see? Are your competitors doing any better than you? It is best to be realistic now, and face any unpleasant truths as soon as possible.
- Where are the good opportunities facing you?
- What are the interesting trends you are 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, lifestyles changes;
- Local events.
A useful approach for 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 create opportunities by eliminating them.
- What obstacles do you face?
- What are your competitors doing that you should be worried about?
- Are the required 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?
Carrying out this analysis will often be illuminating – both in terms of pointing out what needs to be done, and putting problems into perspective.
Strengths and weaknesses are often internal to yourself (or your organization). Opportunities and threats often 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 Analysis Tool.
SWOT Analysis is a simple but powerful framework for analyzing your (or your company’s) Strengths and Weaknesses, and the Opportunities and Threats you face. This helps you to focus on your strengths, minimize threats, and take the greatest advantage of opportunities available to you.