MAB’s guide on how to conduct a SWOT Analysis :
SWOT analysis is a tool that evaluates the strengths, weaknesses, opportunities, and threats which exist when it comes to any business idea or potential plan of action. Before learning about the structure of the SWOT analysis, there are a few points that need to be kept in mind:
- Consulting the correct people: The company needs to consult only specific members of the organization to help with the analysis. Ideally, the organization should call upon one member from each department to act as a representative who will share ideas on behalf of their entire department.
- Free space to share ideas: The members who are consulted should not be restricted in any way whatsoever. They need creative liberty so that there is a variety of ideas to choose from. An individual should behave the chance to give as many ideas as they want.
- Rank the ideas: Ideas & suggestions are noted down and discussed. Every idea must put forward and anyone can counter question or add additional information to an already mentioned point. Give each member a right to vote for the ideas they feel are best.
The following steps need to be followed to conduct a SWOT analysis :
1) What is the objective of SWOT analysis:
To effectively use SWOT analysis the person who is analyzing the parameters needs to have a clear objective or question about why he or she is conducting the analysis. For example, A FMCG brand will not simply just launch a new product in the market.
2) Basic research before the SWOT analysis:
Before one does a SWOT analysis he/she needs to research the industry. This helps in getting a better understanding of the business & its prospects. They will first do market research to have a tentative idea about the response of buyers & what other brands might be their competitors.
3) Identifying the strengths:
This is the first step when we begin the SWOT analysis. The business owners need to discuss and decide what they think are the strengths of their business. Many factors are considered a strength for any given business. For example, A company could be manufacturing a product that is unique and there is no similar product in the market. Similarly, a company could be manufacturing a product at a very low cost which gives them a high profit margin.
4) Identify the weaknesses:
Every business has its shortcomings and one must not neglect the areas wherein they lack. Instead, if they identify them at an early stage there are chances that they can do something to compensate for those weaknesses. The weaknesses section in a SWOT analysis helps in drawing contrasts in the attributes of the business. For example, A company may have listed down their weaknesses but when they compare it after a year they realize that those weaknesses are no longer listed.
5) Identifying potential opportunities:
A business needs to find what kind of opportunities exist for the business. This includes all the areas which can give a brand some sense of exclusiveness. Introducing new technologies, conducting training of employees, partnering with other brands, etc., are an example of such opportunities. One point to keep in mind is that an opportunity for one company can be considered a threat to another. However, an opportunity cannot be listed as a threat in the same SWOT analysis.
6) Identifying potential threats:
Certain factors can become obstacles for a business and have an impact on its functioning. If a business is well aware of the kind of threats that exist then it gives them an upper hand to tackle them efficiently as well. Some examples of threats are a surge in the level of unemployment, an increase in the number of competitors, etc. These can hamper the growth of a business.
After the SWOT analysis is completed the business owners are left with four different lists which include information about the Strengths Weaknesses Opportunities & Threats. The top-tier management further needs to compare the points across all the lists and decide which of the mentioned points need immediate attention. Naturally, there are bound to be certain areas that need urgent supervision.
Once the priorities are the next step would be addressing all the issues which have come forth in the process of SWOT analysis. The strategy-building phase involves developing a plan which can be implemented to answer the question which arose during the first steps of the analysis.