You can be a seasoned company with an established business plan, or be starting out and creating a website for your new venture. Either way, identifying and understanding your competitors at each step of the process can lead to building a better business strategy.
This is where a SWOT analysis comes into play. It is a useful tool for making improvements and keeping your marketing goals on track. In this guide, we’ll explain what this method is all about and how to do a SWOT analysis of your own.
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“In order to get a better sense of what a complete SWOT analysis might look like, we’ve taken the example of a hypothetical massage therapist who is starting a service business."
What is a SWOT analysis?
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is a strategy used by businesses for measuring and evaluating their overall performance, and that of competitors, in an objective manner. All these factors help business owners make smarter decisions for their company, such as if a venture should grow into a new field or rebrand itself.
The first two parameters, strengths and weaknesses, involve internal factors such as your reputation, team, location and intellectual property. These considerations are not necessarily permanent, and can fluctuate over time. It’s within an organization's own control to keep or change them (which can happen for the better or the worse). So, assuming you want to make a positive change, you’re going to need to put forth the effort and time to see that happen.
Opportunities and threats are related to external influences such as competitors, market trends, and prices of materials. Unfortunately, these are not within an organization’s control, and therefore you are not able to change them. That said, businesses should learn how to work with these factors to their advantage, and also adapt their strategies accordingly in order to compete with others in the field.