The benefits of SWOT analysis are numerous – the tool has a broad range of applications, whether to improve the self via personal development, inform a department’s strategy, or grant an entire business foresight of threats and opportunities on the horizon.
In this blog, we’ll explore what a SWOT analysis is, the bonuses of conducting one for business, and the internal and external factors to consider during your analysis.
The tool has been valued and trusted for years, but for those of you who only have a rough idea, or who haven’t encountered it before, allow Embryo to show you how even just half an hour of candid introspection can empower your business, inform your goals and equip you for the future.
What is a SWOT Analysis?
- It identifies:
- What you do well already (strengths)
- What you could do better (weaknesses)
- What you could do next (opportunities)
- What might get in the way (threats)
The Benefits of SWOT Analysis
While you’re in a group exploring the above in your workshop or brainstorming session, you’ll also be quietly gaining the below benefits too. Let’s have a look:
SWOT analysis allows the sharing of ideas and information between different areas of a business which might not necessarily interact. The benefit here is when one department gets a better idea of another department’s knowledge (and knowledge gaps therein), stance, involvement and workload. This improves both departments’ ability to prepare for and solve problems, eliminate disagreements and foster a better working environment.
SWOT analysis allows the participants to gather information cross-departmentally and between different levels of expertise. The session collates information that is already known as well as additional insights picked up in the session. This allows a company to transform questions which arose from identifying a weakness, into possible strengths.
A Hybrid of Strategy Meeting and Training Exercise
Because of the above point of encouraging collaboration, you don’t need to have any extensive training or technical skills to conduct a SWOT analysis, just a brain, a dash of critical thinking and a few experienced participants.
Newer members in the session can review longstanding problems with a fresh perspective and ask insightful questions, and more experienced members in the session can apply their own expertise and industry knowledge to guide the dialogue and inform the newer members, providing a learning opportunity for everyone involved.
No software is required. No elaborate presentations at a fancy venue. No public speakers. Conducting your own in-house SWOT analysis is the most cost-effective way to empower your business and create advantages out of thin air. (Not counting the time spent conducting the analysis.)
It can inform all manner of strategies, from operational strategies to marketing strategies. As a powerful, well-informed marketing strategy is Embryo’s speciality, we have further reading if you want to find out more about planning an effective marketing strategy for your business in 2023.
For smaller businesses, eliminating the need for costly external consultants or software might be a welcome respite when the business needs it most, especially during a period of change or instability.
Through SWOT analysis, companies can identify their unique strengths, but it also helps companies identify their weaknesses, such as highlighting incompetence, outdated technology, problematic processes or inadequate finances.
Recognising these weaknesses can be instrumental for companies to introduce positive changes, like investing in training or new technology.
Quick, Simple Process
A SWOT analysis is a simple model that can be performed relatively quickly during an afternoon, saving the company both time and resources. Not only is a SWOT analysis fast and saves money, but staff members who participate should (hopefully) already have a vested interest in the welfare of the business, putting them in a good position to provide valuable input that’s potent and relevant to the company’s goals. Speaking of goals, (and if you’re in the mood for another framework) SWOT analysis is an excellent precursor to inform your SMART goals.
Brings People Together
Not just literally coming together to discuss the SWOT analysis and share opinions, but fostering stronger relationships throughout a workforce.
Contributing in a deeper and more meaningful way can forge deeper and more meaningful connections between employees – especially if a business is still new, vulnerable and its starting team are all contributing to make it stronger.
Seeing the fruits of those labours and watching a fledgeling or at-risk business turn into a well-oiled machine can foster a great deal of trust and respect between people
Internal and External Factors in a SWOT Analysis
A SWOT analysis provides valuable insight into the internal and external factors affecting a business and allows the business to make informed decisions and provides a competitive advantage.
Strengths and weaknesses are classified as internal factors because they originate from within the businesses and are easier to influence. Internal weaknesses can be acted upon and turned into internal strengths provided the resources and willingness are there.
On the other hand, external factors are a storm on the horizon. Business owners or senior management have little to no control over potential threats and opportunities, such as whether trends shift within a target market or economic upheaval causes instability. Or if a pandemic shackles the world for 2 years.
The first of the internal factors which influence a business.
The strengths that fuel your success – the qualities, talents and assets that make your organisation shine and set you apart from the rest. Maybe you build excellent relationships with outreach and exposure.
Maybe you have a winning USP. Maybe your leadership team is brave enough to take risks that others wouldn’t. Maybe your tone of voice is exceptional and captures an audience.
Your USP, your motivations, your efforts in the community, your resources. The right culture in your office. Ask yourself what you have to be proud of. What are you thrilled to do differently? What makes you special? These are all strengths.
The part you’ll like the least but is arguably part of the process you need the most. Identifying areas of improvement is crucially important for the future of a business.
Think about things such as knowledge gaps, poor training, or outdated processes that hinder instead of help. Uncertain goals or lack of strategy – these are all difficult pills to swallow. But be brutally honest about it. Face each of these weaknesses head-on and allow the business to flourish from the findings.
Devise plans to improve weak areas where your business is falling short. Maybe you require outside help to strengthen your online presence with a dedicated SEO team or invest in an expert paid search analyst to build and execute advertising campaigns.
Countless opportunities are present in the environment surrounding your business (external factors) even if they don’t present themselves.
Opportunities could mean different ways you’re able to empower your business, such as hiring exceptional talent, training schemes, endorsements, partnerships, or new premises for business expansion.
Who knows, opportunities might initially masquerade as threats and weaknesses before revealing themselves. The type of opportunities we’re referring to here are found, not made. You have no control over whether one will present itself – you’ll just have to keep your eyes open.
The second of two external factors which can affect your business. Cast your mind forward, back and side to side. Explore past present and future. Observe the market around you.
Be realistic (but even if it sounds outlandish to you, maybe someone else can glean some insight from it).
Think of threats like competitors, economic state or changes in consumer trends. Even environmental factors like disasters, wars and pandemics.
These are all threats and you have little to no control over them either.
But the benefit of understanding your external threats isn’t so you can alter your opportunities or threats because that’s impossible – it means as an owner or decision maker, you can create future-resistant goals and plan for success, as well as have contingencies in place to prepare should roadblocks pop up along the way.
Conclusion: Take Control and Level Up Your Business with SWOT Analysis
So we’ve explored the benefits of conducting a SWOT analysis, how it provides near-immediate benefits with a quick, cost-effective process, as well as its ability to unify even a disjointed workforce. Through analysis using such a simple tool, businesses are able to take back control of their business performance, create a more positive working environment and turn old weaknesses into new strengths.
So if you’ve been inspired and feel like your business could benefit from a SWOT analysis, feel free to use the prompts to gain some insight into what your business is now and what it could be – just be sure to ask yourself the right questions.
We also have a SWOT analysis template for you to follow, which will be coming soon!
As a multi-award-winning marketing agency based in the heart of Manchester, Embryo understands that starting, maintaining and growing a business tests wills and patience – but you don’t have to do it alone. We can give you a voice, help you find your audience and generate the buzz you deserve.