The Business Beginner's Guide to SWOT Analysis

As a business graduate who has completed a degree in the field - like an AACSB online MBA, for example - it’s likely that one of the many concepts you would have touched on during your studies included SWOT analysis. 

If you aren’t familiar with the concept of SWOT analysis, however, don’t worry. Our business beginner’s guide to SWOT analysis will take you through its fundamentals, as well as provide you with the understanding and insights you’ll require to be able to perform a SWOT analysis of your own. 

What is SWOT Analysis?

In simple terms, SWOT is an acronym incorporating the following elements that can be analyzed within a business analysis framework:

Strengths

• Your business’s unique selling points (USPS). In other words, the positive elements of your business that identify and define it, and make it stand out from your competitors.
• The internal processes, daily operations, and company procedures your business has fine-tuned and can perform to a high standard regularly. 
• Business assets - including funds or capital, fresh ideas and innovations, and other types of intellectual property.

Weaknesses

• Areas of improvement for your business.
• Resources that are lacking or that need bolstering.
• Processes competitors can perform better than your business does.

Opportunities 

• Emerging customer needs or gaps in the market your business could capitalize on.
• Untapped market niches, audiences, and new product and service offerings.
• Areas of the market that haven’t yet been reached by your business’s competitors.

Threats

• Fresh, new competitors emerging on the scene.
• Changes in regulations or legislation that your business does not yet comply with.
• Negative publicity or public perceptions about your company.

Each of these elements of a business can be analyzed by using methods of SWOT analysis. 

Stay with us as we uncover the key steps to follow as part of the SWOT analysis process.

The Key Steps to Performing a SWOT Analysis 

A SWOT analysis of a business can be performed in several key steps:

Step 1: Identify Your Business’s Strengths

In this first step, you must utilize in-depth analysis tools to identify the elements of your business that are going well. 

For example, what internal processes is your business executing successfully in its daily operations? What are your unique selling points or USPs - the elements your business performs better at than anyone else? In that same vein - in what areas does your business outshine your competitors? 

These are your strengths. 

Step 2: Ascertain What Your Business’s Weaknesses Are

On the flip side, there may also be areas of your business that are not doing so well. 

For instance, are there elements of your business’s procedures that do not work as efficiently or effectively as they could? Are you lacking in certain resources? Would acquiring them boost your business’s productivity and effectiveness? 

Taking the time to identify what your business’s weaknesses are can help you map out a game plan to make the necessary adjustments for future success.

Step 3: Seek out and Uncover Business Opportunities

There are always things a business can do better. Similarly, as ambitious business leaders, we can always aim higher to reach our business’s full potential.

When it comes to your business, there may be areas of opportunity that you are yet to capitalize on. Are there perhaps untapped market niches or audiences you have yet to reach? Or maybe, your customers' needs are changing, creating gaps in the market that are just waiting for your business to jump in and fill.

Identifying and grasping these opportunities could take your business to greater heights than you had ever even imagined.

Step 4: Analyze Any Potential Threats to Your Business

When identifying any potential threats to your business, you need to be a realist. There’s no point turning a blind eye to emerging problems, or sweeping them under the rug.

Instead, view these threats as opportunities to strengthen your business against potential roadblocks and obstacles. Your business will emerge stronger, more resilient, and better equipped to combat future challenges.

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So there you have it, the fundamentals of the SWOT analysis process. 

The best part? Once your SWOT analysis is complete, you can implement the necessary changes to grow, enhance, and improve your business moving forward.