If you’re wondering whether to invest your money or expand your business, you may find using SWOT analysis strategy very helpful:
Many chess players use the strategy of finding their opponent’s weakest point and chipping away at it slowly throughout the game. For example, Grandmaster Susan Polgar talks about a game she played in Vienna against Smyslov in 1993 where she kept chipping away at her rival’s infrastructure to gain material until she won. (If you want to hear her describe the game, then watch this 2-minute video.) In business, there is a similar kind of strategy called SWOT analysis that can help you find the winning edge in your industry, keeping you ahead of the rest.
SWOT is an acronym for the following terms:
S stands for Strengths. These are the characteristics that give your business an advantage over others and make you different from the rest.
W stands for Weaknesses. These are the characteristics that place you at a disadvantage relative to other businesses. For instance, what are you doing or not doing, or what could you be doing better to avoid customer complaints?
O stands for Opportunities: These are the unfulfilled market needs that your business could seize to gain an advantage. For instance, your business may have a patent that will make it easier for investors to analyze the stock market. Are you taking advantage of that intellectual property?
T stands for Threats. These can be either internal or external, or even both. For instance, internally you could be understaffed while externally, you could be dealing with a new technological discovery that might threaten to make your business obsolete if you don’t embrace it.
Although SWOT analysis is only a guide since the various elements can be subjective, it is a powerful conceptual tool to help you establish a powerful position in the marketplace. Use it to analyze and build your business, leading it towards success. Sometimes just looking at those four letters can get you and your team started on a life-changing conversation that can help to recognize new opportunities.
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