A SWOT analysis is a helpful tool for understanding the Strengths, Weaknesses, Opportunities and Threats for a business. With this knowledge, you can then put together a strategic plan for how best to take your business forward to take advantage of opportunity while avoiding ormitigating threats.

You can perform a SWOT analysis on any business, not just your own. In fact, it’s used most often as a powerful way of understanding the competition and how they sit in the marketplace.

This information guides your own decision-making, as it points out the areas that need attention and areas that you could benefit from by doing things differently or better.

A great example of where SWOT analysis would have flagged opportunity and threats was with Netflix and Blockbuster. Blockbuster was the established company renting movies and video games, and Netflix was the newcomer.

Blockbuster were continuing to rent movies in the traditional way – physical DVDs and CDs that you had to go and pick up or wait for an order to arrive at your door. There were complaints of long queues and discs that didn’t work. Netflix saw this as an opportunity to introduce a better delivery method and started the subscription service. The rest, as they say, is history.

How to do SWOT analysis

Doing a SWOT analysis on an entire company could take a very long time, so you might want to pick a specific topic to concentrate on. For example, you could look at just the content marketing for a competitor to see how it stacks up against your own.

Make sure to get different perspectives when working on a SWOT analysis. This is because there can be the danger of it being led by perception rather than data, so different perspectives will at least flag up inconsistencies in perception where more research would need to be carried out.

You can get information directly from employees, suppliers and customers as well as from reviews, articles and published information.

Strengths and weaknesses are considered internal attributes, where the control over the trait is held by the company. Opportunities and threats are external and beyond your control, but they can be seized upon or avoided with careful planning. (I’ve used ‘they’ in the questions below, but substitute this for ‘you’ as well if carrying out the analysis on your own business.)

Strengths

When looking at strengths, particularly for yourself, it’s important to consider if your strength point is a true strength or if it’s a common trait. For example, if you compete on price, you might consider your product cheap, but if your competitor sells at a similar price point, this is not a strength. However, if your product had more features but sold for the same price, you could consider value as a strength.

Questions to ask for this section are:

• What do they do well?
• What assets are there (intellectual property, connections, qualifications, awards, people, etc.)?
• What’s the USP?
• What are the competitive advantages?
• Where do they excel?
• Why are they liked?
• Are they expanding/leading in the industry? Why?
• What innovations are they spearheading?
• How does their communication and communication style work for them?
• What are their profits like?

Weaknesses

In the same way as strengths, only consider weaknesses that are specific to the business, not common traits across the industry or between competitors. It’s important to be completely honest when looking at weaknesses, as the whole point of the exercise is to see where improvements could be made.

Ask these questions:

• What could be done better?
• What processes slow down productivity or turn people off?
• Is the company recognised as a leader or competitor in the industry, or are they not known yet?
• What complaints does the company get?
• What is their employee turnover like?
• What assets are they lacking (funding, reputation, brand recognition, employees, etc.)?
• What disadvantages do they face?
• What are they not capitalising on?

Opportunities

Recognising and seizing opportunities before your competition is a great way to get ahead, but the opportunities must be in alignment with your business goals and values, and be right for the stage your business is at. For example, a complementary service might be an obvious choice, but if you don’t have the resources, or if it goes against the brand values you have established, it’s not the right opportunity for you.

Questions might include:

• What are the current trends, or what is on the rise?
• Are there influencers or celebrities to collaborate with?
• What upcoming events or important dates you could take advantage of?
• Is there an opportunity to expand?
• Can you cut out middlemen anywhere along the process?
• Are there processes that you already implement that are becoming more popular (environmental practices, for example)?

Threats

While threats are out of your control, being ready for them is a line of defence and could make all the difference to the survival of your business. This exercise is not meant to make you fear the world or feel impending doom is imminent, and you can’t predict the future, but it can make you that little bit more prepared for when something does come up.

Ask questions like:

• Are there a lot of new entrants to the market?
• Could your product be a fad?
• Is there a large corporation that could influence or take a bigger share of the market?
• How is the market fluctuating (prices, attitudes, etc)?
• Is there anything upcoming that could make your product irrelevant or obsolete?
• Could changes in legislation and regulation affect you?
• Has a new, popular way of delivery/operating emerged that you haven’t adapted to?

What to do after you have your SWOT analysis

Once you have researched and put together your SWOT analysis, you are ready to create a strategic plan to implement changes that benefit your business. Using the data that you have collected about yourself and your competition, decide how you want to move forward and where
changes could be made. Make sure to communicate your plan throughout your business, and prioritise the main opportunities and threats to be addressed. As your business and the market evolves, make sure to update and redo your SWOT analysis to stay ahead of the game.

If you need help completing SWOT analysis for yourself or your competition, please get in touch with Cat on: cat@ckgmarketing.co.uk