A SWOT Analysis is a strategic planning tool to help you position your business within your market and your industry. The components that make up SWOT are: Strengths, Weaknesses, Opportunities and Threats. As a bonus, you can also throw in an additional T (SWOT-T), Trends. Here’s a short description of the SWOT components:
- Strengths: What are your business’ strengths, relative to your direct competition and the market. These are internal. What do you sell, and how do you do it better than anybody else?
- Weaknesses: What are your weaknesses versus the competition and overall market. Again, these are internal factors. Where do you need to make improvements, or at least have plans to fend off attacks against these weaknesses by competitors and a shifting market. Are you lacking resources to compete in certain areas?
- Opportunities: These are long-term goals and are external to your business. Think sales and distribution channels, market sectors, etc.
- Threats: The biggest threats to your survival come from the government, competitors, shifts in the industry, etc. Again, these are external. If you think of an internal threat, that’s most likely a weakness.
- And sometimes Trends: What is the arc of your industry? A great case study is IBM, who has seen its products pivot from typewriters to personal computers to software to services to artificial intelligence. Where is your industry headed in the next ten years?
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