By: Keri Hasson – Marketing Specialist

The acronym SWOT stands for (S) strengths, (W) weaknesses, (O) opportunities and (T) threats. A SWOT analysis of a company is an essential part of the strategic planning process as it provides a full view of your company’s current and future situation. Essentially, the result of a SWOT analysis should be the matching of potential opportunities with resource capabilities.

A SWOT analysis can be conducted at any level of an organization or company division. The main advantages of conducting a SWOT analysis is that it has little to no cost and anyone who understands your business operation can perform a SWOT analysis. This means that you can take steps towards improving your business without the expense of a business consultant or external marketing adviser.

By using a SWOT, you can:

• address a complex situation quickly
• develop goals and strategies for achieving them
• promote discussion, collaboration and planning
• be proactive, not reactive

Here’s a breakdown of each component:

Strengths:

Strengths are the qualities that allow your company to have competitive advantages in the marketplace. These advantages are usually the focal point of your company’s operation and strategic planning. Strengths can be both tangible or intangible and can include things like strong financial resources, skilled and talented employees, competitively priced products/services or a strong reputation.

Weaknesses:

It’s important to not only identify areas of improvement, but to also include a plan to fix and reverse weaknesses. You need to be honest and aware of the elements that hinder your organization’s productivity and ability to perform at full potential. Examples of weaknesses can include poor production outputs, lackluster customer service or lack of funds.

Opportunities:

Opportunities are essential to the development of your company’s strategies and help to identify methods to improve and grow. Try to have a broad scope of any and all opportunities available to your company. Opportunities can arise from the use of new technology, creating more efficient operating environments or by seeking to gain new customers.

Threats:

Threats are elements of vulnerability that could affect the reliability and profitability of your business. Threats can be inevitable and sometimes uncontrollable, but they need to be realized in order to find viable solutions. By assessing and recognizing threats, you can better prepare for them and be proactive instead of reactive. Some examples of threats include reduced profits, increased competition or even economic factors.

Many businesses can better compete by using a SWOT analysis to assess opportunities and challenges even before they arise. Because economic conditions fluctuate rapidly, changes in social values shift and technology evolves, it is good practice to do a SWOT analysis once a year to evaluate your company’s position and reassess the overall strategy.