MGT451_VideoTranscript_Mod03_P3 What Is a SWOT Analysis_ - Bplans.com

Text on screen: Bplans - Start, Run, and Grow Your Business. What is a SWOT Analysis - www.Bplans.com Today I'm going to talk with you about what a SWOT analysis is. A SWOT is a great tool for you to use when you're analyzing strengths, weaknesses, opportunities, and threats either within a business or even in a personal setting. Some examples from within a business would be: you're looking at new market opportunities and you want to assess it. You're looking at a potential strategic partner or potential new hire. So what does a SWOT analysis to look like? Really you can think of it as a square, and then once you have the square you can put like a + through it - and now you have four boxes. And across the top of the box you have strengths and weaknesses. And along the bottom you have threats and opportunities. Okay so let's break down the four areas of the SWOT: the strengths, the weaknesses, the opportunities, and the threats. And I'll start with the strengths because those are internal to your organization, and as I mentioned before, they're positive traits that you have. These are things that you have that potentially your competitors don't have. Maybe you have a very strong internal leadership team. Maybe you have some intellectual property on your technology. Maybe you have access to mentors that give you a strategic advantage. Maybe it's your geographical location that really gives you that competitive edge. These are things internal to your organization, that you have control over that differentiate you in the marketplace. Okay so now lets move on to weaknesses. Weaknesses are internal negative factors in your organization, but because they're internal you have control over changing them and turning them, hopefully into strengths. These could be things like potentially you're missing talent on your team. Potentially you don't have the right technology or the innovation, maybe your leadership is not as innovative as it could be. And so you can make changes internally in your organization to turn these weaknesses into strengths. Now let's talk about opportunities. So opportunities are external to your organization but they are positive factors and traits that can actually help you increase your business. So these are things like potential funding that you want to reach for. So if you're non-profit, maybe they're grants. If you are for-profit and you're looking for funding to grow your business through investment, those are opportunities that are outside of your organization that you can pursue to give you a competitive advantage. But the interesting thing about opportunities is they can also be the same things that can turn into threats for other businesses. For example, an opportunity for you might be that there's been a storm, and maybe you have a product that can deliver fresh water to an area. Now of course that can be a threat to other businesses because potentially that effects and impacts their business negatively, but for you because you have a product that delivers a solution during a time crisis that it now turns into an opportunity for you. Now let's move on to the threats. These are things that are external to your organization but are negative, will have a negative impact on your business. And they're typically out of your control; things like legislation that changes, that impacts your business in a negative way. Funding that is no longer available, potential negative weather that happens, that can negatively impact your business as opposed to earlier where weather could be an opportunity for a business, who serves in times of crisis. So these are things to think about that are out of your control, but you still need to be looking outwardly in your business and monitoring these potential threat so that you can get in front of them as opposed to getting stuck behind the eight ball and not knowing how to respond in the situation. So threats are important for you to take a look at. So there you have a SWOT analysis; the strengths, the weaknesses, the opportunities, and the threats. It's a really great tool for analyzing the situation and what's most important is to think about ways that you can maximize those strengths and opportunities and then minimize those weaknesses and those threats.