swot-analysis

What Is A SWOT Analysis And Why It Is Important

A SWOT Analysis is a technique used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid you in identifying the problematic areas of your business so that you can maximize your opportunities and improve. It will also alert you to the negative challenges which might hinder the prospects for your organization.

Background story

I remember meeting Rohan for a long time. After the repeated failure in getting a job, he finally gave up trying and instead decided to dabble in a little grocery business.

Everything was arranged with care, and each decision regarding the products which would be sold was taken with care.

A prime location was scouted, some handbills printed to let people know about his business and a proper shop was constructed for him.

We all expected that it won’t be easy to make a profit right away, but we still expected him to break even. That didn’t happen within the first quarter. So then came the time to do a SWOT analysis.

There are discovered that while some products sold well, some didn’t in that market. There was also the fact that the place he was operating from already had a concentration of grocery stores.

Carrying out the SWOT analysis helped him figure out what worked, what went wrong, what was the competition and how he could deal with it.

Opening up a business or perhaps you have been in charge of running one for some time?

Then it must have struck your mind to evaluate your business, its objectives or more as a whole.

Want to know how to do it?

There is a technique which will help you do just that:

SWOT Analysis.

What is SWOT Analysis?

Let’s begin at the basics.

SWOT analysis is a technique which is used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats.

The effective use of a SWOT analysis can aid you in identifying the problematic areas of your business so that you can maximize your opportunities and improve. It will also alert you to the negative challenges which might hinder your work.

Why is a SWAT analysis so useful?

SWOT analysis is an effective way of maximizing the opportunities which your business gets.

But on the other hand, it also works towards minimizing the negative factors plaguing your business.

Along with this, you will also be able to evaluate a business’s strengths and weaknesses unbiasedly.

Judging any work unbiasedly is important because it will help in avoiding errors which might come from a lack of insight.

To help you along the way and show you how it’s done, here are SWOT analyses steps:

swot-analysis-steps

Steps to follow to conduct a SWOT analysis

There are precisely four steps which you will have to take while evaluating your business or product as a whole.

These are:

1. Identify your strengths

You should look at your product or business and look at how the brand is perceived by the public.

This is because, in today’s digital media age, public opinions can go a long way. Take into consideration if it is well known or early recognizable.

If not, then try to locate if a specific niche audience well receives it. Now think about your process and evaluate if it is effective or innovative.

Try to answer the tough questions- is there good communication between your sales and marketing?

Are they one the same page and use the same vocabulary whole discussing the product?

One factor many don’t consider well when it comes to social media marketing is SEO tactics.

Proper tactics can ensure that your business website stays on top so that whenever people will search for that category, yours will pop up.

But putting in the appropriate or relevant SEO’s isn’t easy. So you need some strategies to help you along the way.

2. Identify your weaknesses

The whole purpose of this step is to foresee any type of potentially negative factors which could mitigate your success.

So begin by putting yourself into the shoes of your customer. Then ask yourself, what would prevent you from buying the product or engaging with the business.

After this, try to foresee what could possibly be the biggest hindrance to the productivity of your employees.

When you are identifying your weakness you should consider what are the areas of your business which are not or the least profitable.

Analyze these in terms of money and time. Don’t do this alone and take input from your employees as well.

3. Consider every opportunity

This is where your hopes and dreams come in. Think of the kind of opportunities you hope to get.

Potential questions to ask yourself at this stage is what kind of technologies do you want your business to use to make it more effective?

Is there something which can make the business stand out more? What is the target audience you want to reach?

4. Contemplate all your threats

Most businessmen already have a pretty good list of threats made up in their heads. This is because threats are experienced in every step of the way.

But if you are having trouble figuring out the threats then gather up your business partners, employees and all.

Then brainstorm about the kind of obstacles could prevent you from reaching your goal, what could mitigate your success, what tech could cause conflict with your product and more.

You can list your threats down in order which might help you in evaluating them properly, like in terms of least and more likely to occur.

Improper marketing is a huge threat and it could be what ultimately makes you lose out on valuable market share, especially if you are a startup. The effective marketing strategy should penetrate the travel market demographic properly.      

Apple SWOT analysis case study

To understand how it actually plays out and how it should be implemented, you need real-world examples.

So here’s one to help you along the way:

apple-swot-analysis

Apple’s Strengths

Apple is a brand which is undeniably valuable. After all, it was named as the most valuable brand in the world by Forbes.

Also since it’s so easily recognized, so Apple can make a new product and have it enjoy a certain degree of success always due to the virtue of the brand. Thus, the strengths of Apple are:

  • High prices
  • Brand recognition
  • Innovative products

Apple’s weaknesses

It includes the most obvious- high prices. While the high and middle customer base isn’t affected but the lower classes are surely affected.

Along with this, Apple also has an exclusivity problem since it controls all products and services in-house so the burden falls squarely on Apple employees.

There is also the matter of Apple‘s tight control over who distributes limits their market reach.

Lastly, Apple is held to a really high standard and so when it actually comes to creating and distributing new products, the brand prestige could inhibit Apple from experimenting and taking risks.

So to sum up:

  • High prices
  • Lack of proper experimentation
  • Closed ecosystem

Your business may not be as big as Apple, but if you feel like your products are also facing market and sales troubles then here some strategies to help you out

Apple’s opportunities 

One of the major weaknesses when it comes to Apple is its distribution network which remains really small in the name of exclusivity.

But if Apple did choose to expand its network then it could reach more people on a global basis.

Which would put less pressure on their in house employees. Apple also has lots of opportunities to make new products.

They could realistically consider making more affordable products that could reach out to a larger global demographic. Apart from this, they could also think about expanding to new industries.

Finally, Apple could very well continue to advance the technology of its phones. They can take their existing products and then refine those.

This will surely ensure that each such product will be able able to offer as many unique features as possible.

So to sum up:

  • Expand their distribution options
  • Create brand new products
  • Focus on technological advancement

Apple’s threats 

Keep in mind that Apple isn’t the only company which dabbles in making innovative tech. It continues facing tough competition from companies like Google, Samsung and such.

Such weaknesses really do hinder Apple’s ability to successfully compete with tech companies which have more freedom to experiment, or those which don’t have to work within the restrictions of a closed ecosystem.

Another threat to Apple revolves around lawsuits, especially between Apple and Samsung. These lawsuits affect Apple’s reputable image and make customers purchase elsewhere.

Lastly, Apple does need to improve its reach significantly on a global basis. It certainly isn’t number one in China and also doesn’t have a very positive relationship with the Chinese government.

When it comes to China’s neighbor India, Apple’s share there is low and the company faces problems bringing its products to Indian stores.

So to sum up:

  • Lawsuits
  • Tough competition
  • International issues

So, SWOT Analysis essentially is just a roadmap which shows you the way you should proceed with your business.

It basically shows you want kinds of opportunities you are missing out on and what are the kind of challenges you could have to tackle.

A SWOT analysis can effectively tackle both small and big challenges, opportunities, strengths and weaknesses which come its way.

If you want to let your friends know about how they too can improve their business and lead better lives, then hit that share button below. 

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Published by

Bill Acholla

Bill Acholla is an experienced and highly skilled digital entrepreneur. He has worked with some of the best and most recognized brands to build their online presence. Additionally, Bill is a trusted guest author who has contributed strategic, industry-leading advice and guidance to a number of well-known publications. If you want to promote your business through content marketing, check out his business blog at Billacholla.com for more actionable information.

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