SWOT is an acronym for strengths, weaknesses, opportunities and threats. A SWOT Analysis is the best simplified formula you can use to evaluate your company, products and your personnel.
A SWOT Analysis helps you to know exactly what factors may be influencing your position in the market, and to be aware of the best techniques to continue growing.
Your SWOT Analysis should be divided into:
Internal factors – this includes a study of the organisation structure of your company, your team, and the performance of your business.
External factors – are events which are out of your control but which you should still consider in order to adapt to any new changes, and make profits or reduce the amount of loss.
These factors include economic changes, technological development, a change in legislation, and other factors which affect the normal processing of your business activities.
In order to have a detailed research of those factors, the following areas are examined:
Strengths – elements which make your company grow and give you an advantage over your competitors.
Weaknesses – aspects which reduces your performance or puts you at a disadvantage over your competitors.
Opportunities – areas of expansion, or situations that will help your business to grow.
Threats – situations that put our performance in danger, or make our position in the market vulnerable.
A SWOT Analysis will require you to ask for feedback from your customers, your employees, the media, and qualified specialists. A SWOT Analysis is extremely important because it enables the entrepreneur to understand the business better, understand the market and competitors, and have a better control of all the functionalities of his company.