Some opportunities are sometimes identified while the entrepreneur is having his or her self assessment in terms of strength, weakness, opportunities and threats universally referred to as SWOT. SWOT Analysis is a useful self-appraisal system for your strengths and weaknesses that helps establish your business or develop your business by exploiting your abilities, talents and opportunities. It is frequently used to understand, underline and identify the opportunities open to you and the threats you are likely to encounter. SWOT Analysis could also be that initial self appraisal of the ability of the business opportunity to start and survive.
SWOT analysis was originated in the 1960s by Albert S Humphrey and has remained useful till date as a simple start for strategy articulation or as a vital strategy instrument. SWOT also allows achievable goals or objectives to be set for the business while future procedure for the accomplishment of the planning and devel opment of the objectives could easily be derived from its SWOT. With your understanding of the weaknesses of your business, unexpected threats can be eradicated or controlled well ahead, thereby compete favorably in the market environment. In essence, there is Business SWOT Analysis (BSA), and there is Personal SWOT Analysis (PSA). It all depends on what you want to evaluate but both are good sources of opportunity identification and with little efforts, it can facilitate identification of exploitable opportunities. To Use SWOT Analysis, one should understand that Strengths and weaknesses are internal to your organization while opportunities and threats generally relate to external factors. Hence
SWOT analysis is often described as internal/external analysis.
SWOT analysis can be done using these tips along with the simple template below:
Strengths:
Your strengths should be perceived from both an internal position, and from the judgment of the customers and others in the market. You should also be realistic and a list of your company's characteristics of the business or project team that give it an advantage over others should help. In the study of your strengths, consider them with your competitors in mind. The situation where your competitors manufacture good products, but of less quality packaging to yours; your own strength will be quality packaging. However, quality product remains a necessity and therefore a weakness and a threat to your own product. Such strengths could be economical, availability of adequate funding, abundant raw materials, etc.
Weaknesses:
Your weaknesses are your limitations that characteristically place you or the team at a disadvantage when compared with others. You are aware of your own weaknesses than any other. It is a time to be truthful to yourself by asking yourself some unpleasant questions and answers about your weaknesses. Like your strength, this should also be considered from an internal and external pedestal. Such weaknesses in Business SWOT Analysis (BSA) are poor funding, unconducive location, inadequate infrastructure, outdated and poor equipment, poor staffing, while poor comportment, restlessness, drunkenness, low education, irresponsible attitudes, unwarranted socializing, reckless financial management, lack of skill and general ineptitude are mostly the weaknesses in Personal SWOT Analysis (PSA). Constant survey of the market and your competitors’ progress should be done to inform you of your weakness.
Opportunities
Opportunities are contributive external chances for accomplishing the goals and objectives of the venture. These objectives may be to improve productions and achieve better profits in the market or to start up a new business from emergence to survival. In considering opportunities, it is best to search your strengths for possible business or development opportunities. Another tactic is to search your weaknesses for possible reduction of your weaknesses to identify and explore opportunities from them. Such opportunities may open up from associations, connections and affiliations in ones religious, political group, family especially inheritance and an acquired experience by the entrepreneur.
Threats:
This refers to external factors usually outside the control of person or persons in the market environment that could impede the business or the entrepreneur from achieving the expected goals and objectives. These external factors include unpleasant environment, new government regulations, technological upgrades in the industry,
Template of SWOT for a Business Venture
Strengths Your strengths are the internal factors like the advantages of your organization, what you do better than others, the unique or lowest-cost resources you can draw upon that others can't, your organization's unique sales strategy, the factors that make you get the sale and what the people in your market see as your strengths. These are mainly the core operational capabilities you have and the reach of your distribution network. |
Weaknesses Your weaknesses are the other internal factors that need your improvement, those that you need to avoid, those things that may make you lose sales and others that people in your market may see as your weaknesses. They generally involve your product presentation capabilities and baggage of existing investments. |
Opportunities Your opportunities are usually external factors like the good chances you can recognize or the interesting drifts in the market you know. Changes in government policy, technology and markets, social patterns, population profiles, lifestyle changes, and other local issues relating to the business should interest you as opportunities. The customer division as well as cheaper and cost effective supplier of choice for other markets should be considered as opportunities. |
Threats Your threats are mostly external factors like obstacles you encounter, your competitors activities, the changes in quality standards of your job, products or services, changing of technology may threaten some positions, bad debt or cash-flow problems. One also needs to check if any of the weaknesses, competitors under-cutting that can cause unprofitable operating ground and Governments’ unpredictable policies are serious threats to the success of the business. |
