Are you a business owner? Or working with strategic group of your company closely? It is time you try the time-tested tool – SWOT Analysis.
A SWOT analysis can bring many benefits to your business. Analyzing your business practices keeps you sturdy in the market. Neglecting to do routine audits puts your business in risk.
Here are some key benefits that you can obtain doing a SWOT analysis.
This is an obvious and first most benefit of SWOT analysis. SWOT analysis helps you to understand the current situation of the company while informing about the potential future situation. You need to be clear about limitations of SWOT here. SWOT can only help you to understand the existing business scenario in terms of strengths, weaknesses, opportunities and threats. It never propels you with a plan for your business. So as a strategic leader, it becomes your responsibility to use the framed points using SWOT analysis and convert them into actionable strategic plans.
Increase Customer Satisfaction
Who would have thought this? Yes – SWOT analysis can help you to improve your customer satisfaction levels. The key idea here is to understand why your strengths are the way they are and how they are working to improve your customer satisfaction. On the other hand, you should also think about strengths of your competitors through the ‘Threats’ part of SWOT analysis. Weaknesses quadrant depicts clear black-holes that you can improve in your business. These factors if given a proper attention would help you to increase the customer satisfaction level if given a proper plan and action.
One of the less referenced use of SWOT analysis is their ability to aid capital budgeting. In capital budgeting, it is all about choosing the best avenue of investment. SWOT analysis dedicates a separate quadrant for opportunities to identify and leverage potential investment opportunities that can hinder growth of the business in the long term. Leveraging opportunities at the right time improves stability in the market while sustaining growth.
If you run a lean organization or a non-profit, there is a huge need to maximize the return on investment for every dollar you spend. SWOT analysis gives you a clear roadmap with proper approach to understand where exactly your strength lies and how you can leverage to bring more return from the market. By having a clear understanding on what works for your business gives great leverage to bring that extra ROI for your every dollar spent.
These benefits can help your organization in a significant way. Don’t forget to choose a proper SWOT template to do your analysis. It is essential to use professional SWOT analysis templates to do your SWOT analysis to obtain maximum benefits out of it.
When you start using SWOT analysis for your strategic needs – be aware of the truth that this method also comes with certain limitations that you need to keep in mind.
- SWOT analysis does not help you to arrange your issues / problems based on priority – thought it helps you to identify most of them.
- There is no solution or decision making process in SWOT analysis. Thus, solutions and decisions are up to the manager who conducts it. It only provides essential data for your solutions.
- Since there are so much of data, you might get lost without any priorities among potential ideas.
- Not all the information produced in SWOT analysis is useful. However, given time and practice you might be able to filter out essential information that can help your business from others.