Business Consulting Framework Analysis
SWOT Analysis is a basic, yet very powerful technique for understanding your martial arts school or business’s Strengths and Weaknesses, and for looking at the Opportunities and Threats you face. Used in a business context, it helps you determine your company’s points of leverage, problem areas, vulnerabilities, and constraints. Think of SWOT as a tool in a toolbox. If you have a problem you need to fix, you can pull out this tool to help you. However, even though the term SWOT is known by many, a lot of people do not truly know how to apply a SWOT analysis properly. If you own a business, or are starting one, this article should give you some good insight, and I recommend you take the time to do a full SWOT analysis.
SWOT Analysis
What makes SWOT effective is that it uncovers opportunities that you can exploit. Also, by understanding the weaknesses of your business, you can manage and eliminate threats that become vulnerabilities. Moreover, by looking at yourself and your competitors, you can come up with a marketing strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your market.
How to use the SWOT Framework Properly
To carry out a SWOT Analysis, answer the following questions:
Strengths:
* What advantages does your company have?
* What do you do better than anyone else?
* What unique or lowest-cost resources do you have access to?
* What do people in your market see as your strengths?
Consider this from an internal perspective, and from the point of view of your customers and people in your market. Be realistic, and note a strength is not having a good product, a good reputation, or having been in business for a long time. A strength is something that really sets you apart from competitors.
Weaknesses:
* What could you improve?
* What should you avoid?
* What are people in your market likely to see as weaknesses?
* What do your competitors do better than you
A weakness is always something that is “theoretically” in the control of your company, but may be beyond its existing resources and capabilities. Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you do not see? Are your competitors doing any better than you? It is best to be realistic now.
Opportunities:
* Where are the good opportunities facing you?
* What are the interesting trends you are aware of?
An opportunity is a real or anticipated situation or change in the external marketing environment that the firm has not yet addressed. Opportunities are not created by the firm, by they can be leveraged by the firm’s strengths. A useful approach for looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities.
Threats:
* What obstacles do you face?
* What is your competition doing that you should be worried about?
* Are the required specifications for your job, products or services changing?
* Could any of your weaknesses seriously threaten your business?
A threat is a real or anticipated situation or change in the external marketing environment that the firm has not yet addressed. Threats are not created by the firm, by the firm can take steps to neutralize them.
Carrying out this analysis will often be illuminating – both in terms of pointing out what needs to be done, and in putting problems into perspective.
Strengths and weaknesses are often internal to your organization. Opportunities and threats often relate to external factors. You can also apply SWOT Analysis to your competitors. As you do this, you’ll start to see how and where you should compete against them.
After determining your strengths, weaknesses, opportunties and threats, now it’s time to apply the framework and make it more meaningful. Based on the SWOT analysis, identify points of leverage, vulnerabilities, problems and constraints.
1. A strength matched with an opportunity provides leverage (exploit the strategic window while you can)
2. A weakness matched with a threat provides a problem (strengthen weak links competitors may exploit)
3. A strength matched with a threat is a vulnerability (monitor situation carefully)
4. A weakness matched with an opportunity is a constraint (inhibits your ability to exploit your opportunity)
So what’s the key takeaway? SWOT Analysis is a simple but powerful business consulting framework for analyzing your business Strengths and Weaknesses, and the Opportunities and Threats you face. This helps you to focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you.
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