Analysis tools can help you work ON your business strategy and ideas, not just IN your business, as the North East Growth Hub explains.
Business SWOT analysis: measuring a business unit, project or idea
SWOT (strengths, weaknesses, opportunities, threats) analysis is a useful tool that can help you to make decisions in your business, whether that’s the company as a whole, a particular business unit, a specific project, or an idea.
Allowing you to step out of the day to day working IN your business, SWOT is a great technique to help you work ON your business strategy and ideas. Working through the tool will help you to carve out a sustainable niche in your market, and will help you to decide how best to differentiate you from your competitors.
A SWOT analysis can help you to better understand your strengths and weaknesses, while also uncovering opportunities that you are well placed to take advantage of and enabling you to predict and manage threats that may have caught you out previously.
The SWOT template is a good starting point for you to discuss more about the issue being analysed. It is important, however, that you clearly define the subject of your analysis. For example, if you’re analysing a particular project, don’t get bogged down with what a different business unit is doing and what that unit’s strengths and weaknesses are, unless it directly affects the subject of your analysis.
Strengths and weaknesses (internal factors inside your company)
Questions to ask:
Consider your strengths and weaknesses in relation to your competitors. If quality is a key issue in your sector and all of your competitors have a very high quality product, then high quality wouldn’t be an appropriate strength to mention.
Opportunities and threats (external factors outside of your company)
Questions to ask:
Items to consider include factors relating to markets, sectors, competition, audience, trends, seasonality, economics, politics, technology, law and society.
When thinking about your opportunities and threats, you should also take a look at the strengths you have listed and ask yourself if these strengths could open up any opportunities. For the weaknesses you’ve listed, could any of them seriously cause a threat to the way your business operates?
PESTLE analysis: measuring a market
A similar tool to SWOT, PESTLE analysis allows you to assess the market for your idea or proposition. It looks at your business environment – political, economic, social, technological, legal and environmental – and helps you to focus on the ‘big picture’ factors that could affect your business.
The importance of each of the elements of PESTLE may vary for different sectors or individual businesses, but it’s worth considering all six of the elements for your business rather than ruling any out initially.
The extent to which a government’s decisions and policies may affect the economy or a certain industry sector. Ask yourself questions like:
The extent to which the performance of the economy directly impacts your company with a long term effect. Ask yourself questions like:
The extent to which social and cultural factors will impact your business. Ask yourself questions such as:
The extent to which changes, innovations and developments in technology could impact on your industry sector or your business in particular. Ask yourself questions like:
The extent to which law affects the business environment for an industry sector or business. Ask yourself questions such as:
The extent to which physical environmental factors affect your business. Particularly important for certain sectors including tourism and agriculture, some factors can impact on all business types. Ask yourself questions like: