7 ways SWOT analysis can drive growth

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SWOT – Strengths, weaknesses, opportunities and threats – analysis isn’t a new concept for the business world. In fact, SWOT origins date back to the 1960s. Although it has evolved during the last sixty years, SWOT is still a great tool in your business toolkit.

While SWOT’s primary purpose is to uncover internal and external factors that could impact your business, SWOT analysis has many benefits when it comes to understanding risks and growth opportunities. It also allows you to make fact-based decisions as well as uncover fresh ideas and perspectives. It’s for this reason we use it as part of our business improvement program and use SWOT insights to shape business action plans.

Here’s 7 ways SWOT can support your business strategy and uncover real opportunities for innovation and growth for your business.

7 ways SWOT analysis can benefit your business

1. Enhance your business strategy and planning

   While financial data and performance reporting play a role in strategy definition, your SWOT analysis will provide insight into:

    

   • What you’re doing well and what products, services and investments are working
   • Business strengths and opportunities you could leverage for growth
   • Upcoming trends, competitor analysis, and industry changes that could impact your business
   • What is detracting from or impacting business growth, efficiency or profitability
   • New strategies take could be implemented to reach your goals or mitigate risks
   • Unprofitable services, products or investments or those that need improvement

    

   For example, your SWOT analysis could uncover a potential supply chain issue that could cause major operational risks. By identifying it early, you can put strategies in place to under alternative supply chain operations or material suppliers.

    

   All this will help you create a strategy and action plan that is built on real data, aligns with or enhances your strengths, and mitigates the impacts of threats and weaknesses.

    

2. Identify resources and potential investment needs

   Ensuring you have the right resources in the right areas of your business can have big impacts for business efficiency and productivity. The tools you use and the processes you implement also play a part.

   Your SWOT analysis will give you insight into what resources you’re lacking as well as:

   • What resources you’ll need to support your short or long term goals
   • Process optimisation and automation opportunities
   • Upcoming industry changes that may impact resource requirements
   • Operational tools, assets or equipment required to drive success
   • New technology or improvements you might need to invest in

   Looking to expand operations or need a new service to give you a competitive edge? You’ll be able to identify what resources you may need to get there.

3. Better define business objectives and goals

   With SWOT analysis focused on proactive thinking, the insights you gain can be used to shape your business goals and objectives.

   To help your business goals be SMART, they should be data driven. The insights you gain through your SWOT analysis will ensure you’re setting informed, fact-based and realistic goals for your business. The same goes for objectives. 

    

   All this can then be leveraged to create a realistic action plan, with specific tasks and resources you need to reach your short and long term goals. This is why our business advisors always do SWOT analysis before creating an action plan for clients.

   > What do we mean by SMART goals?

    

4. Proactively identify and manage risks

   With SWOT reviewing both internal and external factors that could be potential threats and weaknesses, you can get real insight into risks you may need to manage, mitigate or eliminate.

    

   Understanding your threats and weaknesses provides insight into potential risks you need to mitigate or manage, including:

   • Threats from competitors
   • Changes to industry regulations that could impact operations, outcomes or profitability
   • Consumer or industry trends that may impact how you do business or revenue streams
   • Resourcing risks or weaknesses, existing and forecast
   • Economic downturns and potential supply chain issues

    

   Want to dive in deeper? Coupling your SWOT analysis with a risk survey can help you uncover further risks and strategies to drive growth. This is actually the first step of our business improvement program, ensuring we know actually what risks we need to consider before gathering industry insights.

    

5. Uncover areas of innovation

   Weaknesses or threats aren’t always a bad thing. In fact, they can open up opportunities for innovation and digital transformation to solve problems and mitigate risks.

   For example, if you have a weakness surrounding customer service, it could open up discussions around automating processes to free up your team to focus on tasks that improve customer experience. It could also lead to new technology that streamlines operations, allowing your team to focus on areas that add more value to your customers.

   These areas of improvement might also lead to new ways of thinking and perspectives, especially when you get your team involved in the solution process. Here, leveraging your wider team can bring real diversity of thought and perhaps ways to make improvements without needing to fork out extra budget or resources.

    

6. Identify areas of competitive advantage

   As well as potential external or competitive threats, your SWOT analysis can help you uncover competitive insights, such as:

   • What products or services are giving you a competitive edge
   • Uncovering areas of the market you’re excelling in
   • Opportunities to expand into, operationally, physically or through a product or service
   • Unique selling points from your competitors
   • Competitor weaknesses you can exploit
   • Technologies or improvements you need to reduce disadvantages

    

   All this will help you create strategies that will give you a competitive edge and stand out, especially in crowded and competitive industries.

   This can be a tricky area to do on your own, especially for business owners who might spend more time working in the business than on it. Working with someone like a business advisor can help you identify competitive strengths, weaknesses, opportunities and threats you need to consider.

   As well as providing competitive and industry insights, our business advisory team uses this competitive analysis as part of personalised improvement programs and action plans.

    

7. Measure and track business improvements

   While SWOT can shape your strategies and action plans for the year ahead, it can be a great way to benchmark where you are now. In turn, helping you better track and understand what strategies and improvements are working (and what’s not).

    

   By monitoring and measuring your performance and progress, you can ensure your business can continuously make proactive changes and remain adaptable and responsive to industry changes.

   Putting an action plan in place puts your business on a path for improvements, innovation and growth. However, how many times have you put together a plan only to have it sit still while business is busy? This is where having regular check-ins with a business advisor can keep you on track, helping you get the most from you analysis and ensuring your plan is implemented.

   Knowing this, regular check-ins and unlimited support is built into our 5-step business improvements program.

    

   Not sure how to get started? Here’s 8 straightforward steps to conduct a SWOT analysis from our business advisors and business advisory team.