Unlocking New Opportunities through SWOT Analysis
Today, we’re going to talk about the use of SWOT Analysis as a means of unlocking new opprtunities for us in all aspects of our lives — particularly in our business. SWOT analysis is a structured planning method that evaluates those four elements of a project or business venture. A SWOT analysis can be carried out for a company, product, place, industry, or person. SWOT Analysis is a useful technique that can allow you to better understand your Strengths and Weaknesses, while identifying both the Opportunities available to you and the Threats you face. (Gratefully, the person who first coined this phrase didn’t think in terms of “Strengths and Non-Strengths” or the acronym would likely never have taken off!)
Seriously though, this strategy was created by Albert S. Humphrey in the 1960s, and its remarkable simplicity makes it as relevant today as it was a half-century ago. As the folks at Mind Tools — one of my favourite resources for insightful business strategies and resources suggests — you can use it as a simple icebreaker helping people “kick off” strategy formulation, or in a more sophisticated way as a serious strategy tool.
So very often, entrepreneurs find themselves overwhelmed by things that serve no real purpose in their ultimate pursuit of success.
They may have gotten involved in previous companies, which created a sense of “baggage” they are now embarrassed to let of, or friendships they don’t want to risk severing. They may have invested money on useless and unsold inventory, and not want to deal with the reality, for example that those $120 tubes of overnight skin repair can be bought at the department store for $50 or that their incredible shrink-wrap weight loss system have been sold for about 25 years with the same ingredients for $14/each, making it hard to retail theirs for $25. Or perhaps the worst of all, they may have joined one of those companies that sells them $4000 worth of weight control supplements, including the original “Formula #1”, only to find products with the same ingredients, manufactured by the same maker, are available at grocery stores for $10-$15 retail, instead of $30-$49.
And so rather than doing what’s right for their business and right for their goals, they hide in a cocoon of indecision and waffling. Going further into debt each and every day.
By utilising this strategy, and analysing these four areas of your business or career, you’ll be empowered to cut through the fear, and focus on what you really need to do… on what really matters.
Whether you’re applying this strategy to identify a niche in a market, to find the right company or business for you, or to identify new audiences for your existing products and services, SWOT can unlock the doors to a level of clarity that may be missing. To best benefit from today’s program, we recommend that you download the worksheet that’s been uploaded to the Peak Performance Blueprint Facebook Group. (We want to personally thank the folks at Mind Tools for inspiring today’s focus, and creating this wonderfully simple, but effective worksheet.)
To get the most complete, objective results, a SWOT analysis is best conducted by a group of people with different perspectives and stakes in your business. Your business coach, upline, sales team, even customers can all contribute valid insight. Begin by making a list of your businesses principal characteristics. How would you describe what you do? What service do you offer the public? Frequently, these characteristics and descriptions will help to reveal the strengths you bring to the marketplace. Then ask yourself the four SWOT questions, and write your answers down (using the worksheet)!
Strengths describe the positive attributes, tangible and intangible, internal to your organization. They are within your control.
- What do you do well?
- What internal resources do you have? Think about the following:
- Positive attributes of people, such as knowledge, background, education, credentials, network, reputation, or skills.
- Tangible assets of the company, such as capital, credit, existing customers or distribution channels, patents, or technology.
- What do you do better than anyone else?
- What unique or lowest-cost resources can you draw upon that others can’t?
- What do people in your market see as your strengths? Ask them!
- Why do people turn to you, instead of your competition?
Consider your strengths from both an internal perspective, and from the point of view of your customers and people in the marketplace.
Weaknesses are aspects of your business that detract from the value you offer or place you at a competitive disadvantage. You need to enhance these areas in order to compete with your best competitor.
- Upon what three or four primary aspects of your business or service could you improve?
- What should you avoid?
- What does your business lack (for example, expertise or access to skills or technology)?
- Does your business have limited resources?
- What are people in your market likely to see as weaknesses? Don’t be afraid to ask!
- What factors end up making you lose sales or enrollments?
Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you don’t see? Are your competitors doing any better than you?
Opportunities are external attractive factors that represent reasons your business is likely to prosper.
- What good opportunities are you aware of right now?
- What opportunities exist in your market or the environment that you can benefit from?
- Is the perception of your business positive?
- What interesting trends are you aware of, which could be turned into opportunities?
Useful opportunities can come from such things as:
- Changes in technology and markets on both a broad and narrow scale.
- Changes in government policy related to your field.
- Changes in social patterns, population profiles, lifestyle changes, and so on.
- New or industry leading research.
- Breakthrough approaches to marketing or compensation.
- An economic downturn in the perceived “economy”.
A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
Threats include external factors beyond your control that could place your strategy, or the business itself, at risk. You have no control over these, but you can control your response and the strategies you choose to employ to address them.:
- What obstacles do you face?
- What are your competitors doing that you’re not?
- What factors beyond your control could place your business at risk?
- Are there challenges created by an unfavorable trend or development that may lead to deteriorating revenues or profits?
- Is your company changing the compensation plan?
- Does your company restrict you from professional marketing channels your competition is permitted to and actively using?
- Is changing technology threatening your position?
- Has a new product or technology been introduced that makes your products, equipment, or services obsolete?
- Do your company growth slowed by bad debt or cash-flow problems?
- Could any of your weaknesses seriously threaten your business?
Another very helpful too from Mind Tools is their PEST ANALYSIS — a simple and widely used tool that helps you analyze the Political, Economic, Socio-Cultural, and Technological changes in your business environment. Check it out as well.