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Why is a SWOT Analysis Important for Your Business

SWOT analysis is a business analysis. As its name implies SWOT stands for Strengths, Weaknesses, Opportunities, and threats to a business. The objective of doing SWOT analysis is to ensure that the objectives are in proper shape and to identify the factors related to the project. In the SWOT analysis, strengths and weaknesses are internal factors while opportunities and threats are external factors. For the success of a project, the SWOT analysis is critically important. It is suggested that you read the article completely and don’t forget to share it with your friends as well. SWOT analysis has four factors and we will get into the details of each one by one.

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Strengths:

Strength in SWOT analysis is an internal factor. It defines an organizations’ capabilities and resources that have the capacity to take competitive advantage.

An organization’s strength can fall but not limited to the following categories:

Good reputation

Strong brand name

Cost advantage

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Example:

If your business has a good reputation then it will fall in the strength area of your business. You have to analyze all your strength that has a competitive advantage.

Weaknesses:

Weaknesses are also an internal factor. This factor includes all those things that prevent you from successful results. While doing SWOT analysis you have to think that what your business loopholes are. It could be anything from lack of funding, week internal system, rivalry to insufficient material, etc.

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Example:

Poor reputation

Week brand name

Ineffective cost

Opportunities:

Opportunities in SWOT analysis is an external factor because opportunities come from the external environment of the organization and not from the internal environment of the organization. And opportunities help you to grow faster and to be successful. If you will grasp opportunities at the right time then it will lead your business to become a venture.

Example:

New technology arrival

New Market

Less competition

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Threats:

Threats are external factors. And threats can affect your business growth. And that’s why it is very important to take a deep analysis while doing a SWOT analysis. Threats can portray a negative image of your business. Threats factors can be but not limited to the following.

Examples:

Change in trend

New rules and regulations

New substitute for your product in the market

Advantages of SWOT analysis:

  • You can explore new solutions to your business problems through SWOT analysis
  • By doing SWOT analysis you can figure out those barriers and hindrances that are between you and success. By analyzing these barriers you can search for those factors that can solve it.
  • You can decide the most effective directions. And hence it can save you from a lot of problems.
  • It will minimize your weaknesses. Because SWOT will help you to identify those factors in prior.
  • It can consolidate your strengths, just like you can identify your business weaknesses similarly with the help of SWOT you can identify your strengths.
  • SWOT analysis ensures the success and survival of your business. And it is also helpful for the long term planning of your business.
  • It is also very cost-effective. And it can also save your business from future loss.
  • You can use SWOT in a wide range of applications. Whether you have to do strategic planning or you want to do competitive analysis or other studies. You can analyze those factors that are in favor of your business as well as unfavorable factors.

In this article, We have shared a SWOT analysis with you. We also have shared advantages of SWOT. By reading this article you should be able to determine your business strengths, weaknesses, opportunities, and threats. We really hope that it was informative for you. If you have any queries then do let us know. Please share your feedback in the comments section given below.

Huma
Hi, I am a professional content writer with 3 years of experience in this field. My skills comprise of web content writing, product related writing, blog or article writing, etc. I work diligently to implement the styles and creativity. If you have anything to share with us then do tell us in the comment section reserved just for you 🙂

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