SWOT Analysis For Business Planning

SWOT analysis is known as a classical method for strategic planning and at the same time it is known as an abbreviation which stands for the following words:
SWOT Analysis For Business Planning
S – Strengths
W – Weaknesses
O – Opportunities
T – Threats

This method for analysis and planning is considered to be created by Albert Humphrey from Stanford Research Institute, while he was making some research during the 60s and 70s of the 20th century, using data for some companies in the Fortune 500 list.

In fact, SWOT analysis is a method not only for analysis, but also for planning. And this is important, because no matter how detailed and accurate an analysis is, it gets generally useless without some planning as a subsequent step. After all, why should you analyse something that concerns your company if you do not intent to improve it or use it as an advantage in any way?

What is SWOT analysis used for?

SWOT analysis is a method of strategic planning, which is used to make an assessment of the strengths and weaknesses of your company, product or service; and compare the opportunities you need to take advantage of with the threats, which you need to avoid. This way you are supposed to easily identify what you do best and you will be able to find the most appropriate way that your company needs to follow in order to gain success.

It is very important to be absolutely aware of all positive and negative factors that are standing in your way when starting your business. You will save yourself a lot of unpleasant surprises in the future and you will be able to prepare yourself for the difficulties that are to follow and meet them adequately.

There are various ways of sorting out the data in order to analyse it. However, it seems that the tabular form is the easiest one to use. In addition, you should know that every aspect of your SWOT analysis requires some time, efforts and persistence in order to get the results you want, but it is worth it.

Here are some aspects of every of the four features of SWOT analysis you can use when filling in the table that concerns your company:

Strengths

  • competence of the organization/company in some key areas;
  • better production capabilities;
  • cost benefits – this is usually the total costs and organization structure of your company or organization;
  • factors you can benefit from;
  • other component advantages;
  • becoming a market leader;
  • better competitive skills related to maintaining a competitive fight, better equipment, etc.;
  • the company/organization is well-accepted by its customers;
  • successful management;
  • financial resources, which give the organization an opportunity to finance its own activities included in its business plan;
  • the opportunity and the ability of the company to isolate the pressure of competition and become stronger competitor itself

Weaknesses

  • outdated facilities and equipment;
  • old technology and technological solutions;
  • lack of recent research, development and implementation activities;
  • too narrow product range;
  • an availability of internal organizational problems that are connected to lack of key skills and competence;
  • poor management;
  • worsening competitive positions;
  • low profitability;
  • lack of clear strategic activity;
  • weaknesses in the implementation of the company’s marketing strategy;
  • poor image on the market;
  • lack of a good distribution network that does not meet the necessary conditions;
  • poor marketing skills;
  • lack of financial resources for the implementation of the business plan

Opportunities

  • an opportunity of getting some new customers;
  • an opportunity of getting to some new markets or market segments;
  • a differentiation of activity;
  • an opportunity of moving towards a better strategic group in terms of changes in the environment;
  • rapid market growth;
  • an opportunity of vertical integration

Threats

  • slow market growth;
  • increasing sales of some substitutes;
  • new competitors;
  • changes in the needs and requirements of the customers;
  • adverse changes in the business cycle;
  • unfavourable demographic changes;
  • unfavourable public attitude towards the company or the organization;
  • unfavourable government policies, such as enhanced tax deductions, etc.

What is the SWOT matrix used for?

The SWOT matrix is an important management tool that combines the organization’s inner strengths and weaknesses with the external threats and opportunities and helps the managers of the company realize the risks and future possible strategies. After all, knowing what strengths and opportunities to use is a crucial part of your company’s development. The SWOT matrix generates some alternative strategies, but it does not select or determine which one is the best.

About Jane Mires

Jane Mires is passionate about everything related to business. She currently works as a manager of http://www.qualitycleaninglondon.co.uk/cleaning-services-nw6-kilburn/ and she loves her job. Thanks to it she has so much experience which she shares with her readers.