Nothing like an acronym in the title!

A SWOT analysis is a strategic planning tool that helps companies gain a better understanding of where they are positioned in the marketplace.  In a nutshell, SWOT stands for the Strengths, Weaknesses, Opportunities, and Threats of a business, project, or situation.   Taken separately, each category can help identify core attributes of a company that can help direct future initiatives.  Collectively, it can offer a measuring stick for market positioning within the trade area.

Conducting a SWOT analysis is a bit humbling to say the least.  It is easy to articulate the strengths of a business, but can be a bit unnerving to identify weaknesses, opportunities, or God forbid, threats to the organization.  Nobody wants to contemplate that in a blink of an eye, a business can falter.  Remember, COVID??  I believe that companies moving forward will be less likely to discount the possibility of a catastrophic event that could upend their operating model.

With that being said, let’s take a deeper dive into the components that make up a SWOT analysis:

Strengths – Think of this as “what gives us an advantage over our competition”?  Listed here should be the different selling points of the business and what makes it unique in the marketplace.  Many of the strengths will lead to a strong brand reputation that could include a strong employee workforce that creates a very loyal customer base.  It could be that the company has a very defined and advanced technological advantage that clearly shows their innovation in the marketplace.  Operationally, it may have an advantage due to their efficient processes and procedures.  Collectively, all of these contribute to the overall strength of the business.

Weaknesses – While strengths may offer a competitive advantage for the business, weaknesses can detract from the overall value.  If the business is clumsy in its operations or lacks resources (financial, human or technological), the cumulative effect is that most likely the business will have poor brand recognition and an inferior overall financial performance.  Great efforts will need to be made to improve processes or reduce high operational costs to expand their Marketshare and ultimately, improve overall customer satisfaction.

Opportunities – So, now you look toward the future – what can be leveraged for growth?  The company needs to take a long look at how it expands market operations, assuming it has its ducks-in-a-row first.  This could be looking at new demographics, geographies or competitive failures to fill gaps in its current configuration.  It could also look at emerging trends or technologies and look to fill needs with a new product line.  They could also identify strategic partnerships or collaborations that could be leveraged in the future.  Finally, in some cases, changes in governmental regulations may open new opportunities that were once unavailable, favoring the business.

Threats – Lastly, and perhaps the most unpredictable of them all – the threats.  Threats can come in a variety of aspects, but it all comes down to identifying what external factors pose risks to the health of the business.  Closer to the core, the competition could intensify and offer customers – your customers – an alternate buying experience.  Economic downturns or financial instability may cause both short and long-term challenges to your business.  A global crisis, like COVID, showed each of us the impact a major event can have on supply-chain; regulatory (lockdowns); and overall customer service (delivery and pickup).

In summary, a SWOT analysis provides a high-level strategic platform from which a business can identify what to double-down on; what to improve upon; how to take advantage of new opportunities; and how to mitigate the overall threats to the health of the business.  It can provide a roadmap for success if properly vetted and later, implemented.  Or you can leave everything to chance…..the choice is yours.

Want more ideas?  For more information on Strategic Business Planning, visit the Gray Cat Learning Series: https://www.graycatenterprises.com/strategic-planning