What is a SWOT analysis and why is it useful in business?
SWOT stands for strengths weakness opportunity and threats.
A SWOT analysis is a way of assessing these four areas of your business and can be used to help you make decisions within your business.
It gives you the time and space to take a step back from your business and think differently, rather than relying on fag packet thoughts or knee jerk reactions.
It allows you to make the most of what you have got, take advantages of a situation and make decisions.
It can also highlight potential hazards and reduce the chances of failure.
Four areas to look at and consider whenever you are making decisions:
• Strengths – What do you do well?
• Weaknesses – What could you improve on?
• Opportunities – What opportunities are open to you?
• Threats – What threats are there?
It may be useful to think of strengths and weaknesses as internal factors i.e. whats going on in your business, and opportunities and threats as external factors i.e. what effects are from your competition or wider economy
Once you have looked at all four areas you’ll have a potential list of actions to take i.e. build on your strengths, boost the areas of weakness, head off any threats and exploit the opportunities.
You’ll be able to prioritise your thoughts ideas, allowing you to focus your time money and energy on the most important areas of your business.
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