Every business owner should conduct a regular SWOT Analysis to assess the company’s strengths, weaknesses, opportunities, and threats in relation to its competition. A SWOT Analysis helps evaluate where a company stands in a competitive market and what steps need to be taken for further strategic planning, helping decision makers draw a future roadmap for the company. The importance of conducting a SWOT Analysis can be summarised as follow:
- A SWOT Analysis helps organisations get visibility on their current status, letting them understand and measure overall business performance.
- A SWOT Analysis lets a business analyse their strength, which in turn can help them better penetrate the market to meet business targets.
- A SWOT Analysis lets organisations get visibility on their weaknesses and potential areas of improvement. This information helps them plan for and mitigate future roadblocks, ensuring long term growth of business.
- By leveraging its SWOT Analysis, a business can create a strategic plan to meet desired objectives and adapt to changing market conditions.
- A SWOT Analysis lets businesses understand and better identify internal and external factors and their positive and negative impacts on the business. This information can help businesses be more proactive by helping them take appropriate actions in a dynamic market to maintain momentum.
In conclusion, SWOT Analysis is an important tool to understand the health of an organisation. It allows decision makers to identify not only where an organization stands, but also where they need to improve. This gives them the ability to be a proactive player in the market while helping them remain competitive.
Use the following checklist to start on your SWOT Analysis.
SWOT Analysis Checklist 2021…
Strengths (Internal, Positive Attributes Of Your Business)
- What is my company’s competitive advantage?
- What is our unique selling proposition?
- Do we have exclusive relationships with suppliers or distributors?
- How extensive is our distribution network?
- What are the strengths of our marketing and sales team?
- Do we have a well-known brand?
- Do we have any off-take customers and/or early sales?
- Do our employees have skills or expertise that our competitors’ employees lack?
- Do our employees have professional accreditations or certifications that give us an advantage?
- Do we have proprietary technology, intellectual property, or other valuable proprietary information?
- Do we have a prototype, or proof of concept that has been tested in the market. Alternatively, have we implemented our idea on a Pilot Project Basis to test market/customer acceptance?
- Do we have equipment or machinery that our competitors don’t?
- Does our location or building give us a competitive advantage?
- How well capitalised is the business?
- Can we easily access additional capital if needed?
- Do the business’s profit margins and other financial indicators compare favourably to industry benchmarks?
Weaknesses (Internal, Negative Attributes Of Your Business)
- What complaints do we frequently hear from customers?
- What objections do we frequently hear from prospects?
- Is the business’s distribution limited?
- Does the business’s location or physical plant have any weaknesses?
- Are the business’s technology, equipment and machinery outdated?
- Is the business adequately staffed?
- Do employees lack skills or expertise needed to compete?
- Does the business suffer from cash flow problems?
- Are the business’s profit margins and other financial indicators poor compared to those of competitors?
- Does the business have excessive debt?
- Would the business have difficulty accessing additional capital?
Opportunities (External, Positive Factors That Could Help The Business)
- Do competitors have any weaknesses the business could benefit from?
- Is the target market changing in ways that could benefit the business?
- Is there a potential niche market the business is currently ignoring?
- Is there something clients and customers are asking for that the business doesn’t provide, but could add?
- Are there upcoming local, regional or national events that could present opportunities for the business?
- What opportunities for geographic expansion exist?
- How might current and projected economic trends present opportunities for the business? (i.e., housing prices, employment rates, consumer confidence)
- What changes are taking place in the industry that could create opportunity?
- Are there potential new sources of financing that could help the business?
- Could projected changes in interest rates, tax laws or banking regulations benefit the business?
- How might proposed changes to local, provincial, national, regional, or neighbouring government positively affect the business?
How could predicted technological advances create opportunity for the business?
Threats (External, Negative Factors That Could Hurt The Business)
- Are our competitors planning expansion, new product or service launches, or other changes that could hurt our business?
- Are there businesses that aren’t currently direct competitors, but could be in the future?
- Is our target market shrinking?
- Could predicted social changes negatively impact demand for our product?
- Does the business rely too heavily on one big customer?
- How might current and projected economic trends (i.e., housing prices, employment rates, consumer confidence) negatively impact the business?
- What predicted industry trends could hurt the business?
- Could changes to external financial factors, such as revised lending standards, increased cost of capital or higher interest rates, hurt the business?
- Are there projected increases to the cost of doing business (i.e., rent, wages, inventory, utilities) that could hurt the business?
- Could local, state and national governmental changes, such as regulatory restrictions or new trade agreements, negatively affect the business?
- How might predicted technological advances negatively affect the business?
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