S.W.O.T. Analysis

What is Business Analysis? There are various definitions, much of it depends on where or how it is applied. Simply, it is the process of understanding internal business process, identifying business needs and recommending solutions that deliver value to stakeholders.

There are several Business Analysis techniques and one of the most important is the S.W.O.T. Analysis. Most know what it is, but few use it honestly to analyse their internal processes and the external environment. S.W.O.T. is an acronym for Strength, Weakness, Opportunities and Threats.

Strength of the company are the qualities or actions that it does well. Especially so if they are different from the competitors and gives the company an advantage. Examples are, a positive company brand, a favourable location, excellent customer support or high quality products.

Weakness of the company are negative characteristics that are disadvantages to the business. Examples are poor reputation, unreliable product, unreachable customer service or little knowledge of customer profile.

Opportunities are external factors that have the potential to provide a positive outcome for the business. Examples are an underserved market, relatively low competition, a change in regulation leading to an emerging need for your product or a new product that opens a new segment in the market.

Threats are external factors that have the potential to provide a negative outcome for the business. Examples are new competitors, changing regulations that restrict your business, increasing material costs or new technology that has the potential to replace your product.

The S.W.O.T. analysis is best conducted by a team with members from various elements of a company. For example, if an analysis is conducted for the sales department, members should include representatives from Finance, Logistics, Customer Service, Marketing and of course representatives from various levels of the Sales Department. Everyone plays a significant part in the entire Sales process.

Here’s an example of a S.W.O.T. analysis of a new Prosthetics and Orthotics service provider. After noticing that the premium segment of the Prosthetics and Orthotics market was underserved, the owner decided a premium P&O workshop that provides high end devices to users was needed. He decided to start a P&O workshop, equipped it with high end machinery and furnished with a premium design. He also picked a central location that was easy to find and provided good handicap access. As the company was new to the market, its products and services was unknown to doctors, reimbursement organisations and customers. Looking for a second experienced Prosthetist and Orthotist also proved to be difficult as there were few candidates available. 6 months after opening, sales started to pick up as people noticed attractive social media posts put up by the owner. However, it wasn’t enough to cover the operating costs. The business needed to attract more sales to become profitable. A S.W.O.T. analysis was conducted and it revealed 2 important areas of improvement.

Example. S.W.O.T. analysis of a P&O Service Provider.

The 1st challenge was developing the sales channels. In the P&O service provider sector, customers are either referred from doctors, medical professionals and reimbursement organisations or from an internet search. A marketing plan was created to develop these sales channels to increase the awareness of services offered. The marketing plan included face-to-face sales calls with referrers, such as, doctors, nurses, physiotherapists and reimbursement organisations as well a digital marketing strategy that included a relevant website and an effective social media campaign.

The 2nd challenge was increasing the productivity of the workshop. Although the workshop was equipped with the best tools and machinery available, they were not arranged to fit the shape and space of the floorplan and did not facilitate a smooth workflow.. There was also insufficient workspace for machines such as routers or ovens, which not only made it challenging for technicians but also dangerous.

The S.W.O.T. analysis is one of several techniques used in Business Analysis and it is one of the most effective. Truly understanding your business is critical before developing strategies to solve business challenges.

If you would like to know more about how Business Analysis can help with your business drop us a message at Daryl Lim Consultancy.