I used to write business plans and now I coach persons to write their business plans, and from time to time there is the rolling of the eyes when it comes to the SWOT analysis – the analysis of your company’s Strengths, Weaknesses, Opportunities and Threats.
Either they’ve done it so many times and still can’t see the value or hear so much about it they’ve had enough. It’s possibly one of those things people consider to be overrated. However, there is a reason it is present in just about every business plan template, or strategy facilitation exercise. It is important.
[Different angles] The SWOT ensures that you look both inside and outside the firm before writing a strategy.
Looking without is important. You need to pay attention to the people you sell to and what’s happening there – your market; and to the persons doing the same as you – your industry – and all the businesses that support your industry.
If you aren’t paying attention, while others are, then you may get left behind for not seeing an opportunity, or a threat for that matter.
When you look within, it helps you to continue to do better year after year. The better you understand your strengths the more you are able to either leverage them (future) or maximise them (present).
Knowing where to invest – capital, capacity, people, - is best determined if there are weaknesses that must be improved or ‘hedged’. Your understanding could mean success or failure of your business.
So why not look at your SWOT for your business today.
It may help you for today’s strategy
Answering these questions, you then look at which of your strengths you leverage and which weaknesses need to be addressed.
It may guide your innovation for tomorrow
Think about industries and markets today. Are they anything like they were ten or even five years ago? Nope. What has happened to companies that haven’t changed? Some no longer exist or are struggling.
Some failed to pay attention to what was happening in order to respond. Threats may force you to innovate your product, service or business model – like how you deliver or even a new market. The same for opportunities.
An assessment can force you to develop ways to respond – innovate and stay ahead of the field.
This is only a short article, however, the next time you get a tad annoyed when you have to go through a SWOT – rethink. Get excited for what a thorough analysis, followed by a strategy to address it could do for your company.
Coach Arlene Martin