SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
SWOT Analysis
What is a SWOT Analysis?
A SWOT is a tool or framework that enables you to easily assess each of the four key areas that should always be at the forefront of your business strategy.
The SWOT analysis is an essential tool for any business to use, as it helps them identify what they do best and how they can improve in future. It also allows companies to see areas where competitors might be able to take advantage if protections aren’t put into place immediately-helping. You stay one step ahead!
The SWOT analysis is an examination of both internal and external factors to see how they can be used to your advantage. Some of these will come with control, while others may not. Still, it’s wise that wherever possible, you should take action based on what information has been compiled during this process – even if logging everything into a spreadsheet or database will help give insight into where there might still be unexplored opportunities!
Let’s explore how to carry out a SWOT analysis in this article.
When you Should use a SWOT Analysis
The SWOT analysis is an excellent way to take stock of your position before making any significant decisions or creating a new/ updating an existing strategic plan. Throat clearing for new initiatives, policy changes or pivots can be done strategically by doing this analytical tool first so you know where all the strengths and weaknesses lie. It’s a great tool to use for identifying any blind spots that are easy to miss when you’re busy in the everyday operations of the organisation.
It’s also a good idea to include your team in the SWOT process; this way, you can ensure no stone is left unturned.
Team at work
Using your SWOT Analysis to Inform your Strategy
Performing a SWOT analysis is always valuable. But, like reading a self-help book and not putting anything into action, you’ll see no improvements. So the final and most crucial step is to create objectives and an action plan off the back of your findings so you can execute improvements immediately.
An effective Business Plan is your roadmap to success. It clarifies all aspects of the business, from marketing and finance through operations, products or services you provide, and how you will outperform your competitors and stand out in the market.
A strategic plan will help you grow and expand, creating long-lasting success by ensuring that all areas are covered in detail.
Even if you’re not just starting, updating your business plan is a crucial way to keep the vision and growth of your company in mind. By reviewing and updating it often, you can identify what’s working well and where things could be improved for future success!
This article looks at the top 3 benefits of having a business strategy.
Clarity and Direction
A business strategy will help you set the direction for your company and make it easier to work towards, as you’ll know exactly where you are going. Your strategy will help you make the right decisions for your organisation. A good Business Plan can help identify what’s important and when to focus on them so that there are no distractions or resources wasted on unproductive tasks or investments.
Business Planning
Structure and Smart Decisions
With a strategically planned company, it’s more possible to know whether or not you’re making the right moves.
A business strategy will help guide your decision-making process and give an insight into which path might be best for success!
A business plan is like your company’s roadmap, setting out what you want to achieve and when keeping your company well structured. It becomes an essential reference tool that helps keep everything in order – from sales targets, Key Performance Indicators (KPIs) or operational milestones and every other aspect of running a successful enterprise!
Working together in business
Measuring Success
It is essential to have a business strategy if you want your company or business to succeed. If there isn’t one, it can be challenging to measure success because the only thing that will count as being successful are things like revenue numbers and market share growth without any clear target in mind for what those outcomes mean specifically, which means they won’t help much when planning future moves beyond just looking back over past performance stats! A well-thought-out plan with defined targets ensures progress regardless of whether something went right this time or wrong. It helps organisations focus on achieving even more by staying ahead of themselves instead of getting stuck under their weight.
Strategic plans are like a map to help you stay on track. They include an assessment of where you are now, your company’s vision and mission statements and goals to drive the company to success. The goals can be broken down into smaller milestones or tasks by the end date envisioned to ensure your business strategy is successful. The journey to a strategic plan begins by identifying where you are now.
Strategic planning is an essential part of any organisation.
No matter how big or small your business may be, there will always come a time when you need to think about where it’s going next.
This article will walk through how to get started developing one for your organisation, including what steps need to be taken to make sure everyone stays informed along the way!
Tracking Business
Developing a Plan
It’s not enough to know where you’re going when developing your plan; your team must clearly understand the current state. This starts with understanding who they are and what makes them unique, but also includes asking questions like “What problems does this group solve for customers?” or “How do I see our success in terms of business goals?”. While these might seem simple on paper, collecting data from all stakeholders will help shape an accurate portrayal and identify opportunities missed at a high level. The critical data sources you should gather are; customer insights to learn about what customers want, employee feedback and SWOT analysis.
Once you have an accurate picture of your current situation, you can set some goals to improve and drive the organisation forward. When you’ve figured out your strategy, it’s time to put pen to paper. You’ll need a plan that is flexible enough for changing conditions but still has the outlines of what will happen at each stage.
Executing your Plan
Now that you have set up your plan, it’s time to execute it. This means clear communication across the entire organisation so everyone knows their responsibilities and how they can measure its success with key performance indicators (KPIs). KPIs will help gauge which parts of this strategy work best for each business process to achieve optimum outcomes overall!
Measuring Performance
Review and Revise
Your strategic plan is a living, breathing document. It should be constantly reviewed to ensure you are responding to any market changes and updated as needed to ensure that you’re always staying on top of the game and taking the best possible steps for your company’s future growth!
Lastly, the most successful strategies are those that change and evolve with your company. As you achieve goals or the needs of your business shift over time—it might be worth creating a new plan to suit these changes!
Businesses tell me that they have no time to work on business strategy. The reality is that businesses can feel rudderless without a business strategy. A business strategy is a great way to help an organisation achieve goals, and define its methods and tactics. A business strategy needs to include the whole team and become what you do every day and not something that gets done occasionally.
Business Strategy
What is a business strategy?
A business strategy is a set of objectives that articulate the organisation’s business plans. A business strategy also defines what the organisation needs to do to achieve the goals and will guide the way. This helps for better decision-making and workforce planning, and resource allocation. A business strategy guides all the organisation’s departments in a clear set of critical responsible areas (KRAs) and working together to achieve the organisation’s goals.
It is essential to create a business strategy aligned to your organisation’s purpose, vision, mission and values to ensure that your strategic objectives align with your culture and meet your customers’ needs.
What are the key considerations for creating an effective business strategy?
When creating a business strategy, it is essential to have insight into your organisation, foresight into the environment around you, and opportunities for future planning. This will involve using tools such as SWOT to assess where your organisation is at a point in time and research your current and future sources of sustainable growth and innovations. Assess the external factors that may impact your organisation or industry, such as:
Connected all the time – what does this mean to employee wellbeing and delivering to your customers
The information age – are you aware of all the latest industry innovations
Artificial Intelligence (AI) and robotics
Codification of money
Cybersecurity
Life Sciences
Climate change
Getting the whole team together early in the process will ensure that you consider all the essential factors such as the strengths and weaknesses, create or review the vision and identify your top big hairy audacious goals (BHAG). In addition, the process will help you determine where you are now, the external factors to consider, where you want to go, and how to get there.
Elements of Business Strategy
Basic Business Strategy Planning Process
Planning Awareness
Formulating goals
Analysing the external environment
Analysing the internal environment
Identifying strategic opportunities and threats
Performing gap analysis – create a strategy that leverages your strengths and identifies any gaps that need to be addressed.
Developing alternative strategies – is essential also to building contingencies.
Implementing strategies – creating a business action plan, including all stakeholders, is crucial to executing your strategy.
Measuring and controlling the progress
Planning and awareness – A business strategy helps you identify the key steps to reach your business goals. Setting big goals is essential to stay focused on achieving your objectives.
Efficiency – A business strategy allows you to allocate resources effectively for your business activities, automatically making you more efficient. It also helps you plan for deadlines, assign job roles and stay on track for your project goals.
Control – Creating a business strategy gives you more control over choosing the activities that will directly help you reach your goals and allows you to quickly assess whether your actions are getting you close to your goals.
Competitive advantage – By identifying a clear plan for how you will reach your goals, you can focus on capitalising on your strengths, using them as a competitive advantage that makes your company unique in the marketplace.
Other Key Components of Creating Business Strategy
Vision
A business strategy is intended to help you reach your business objectives. With a vision for the direction of the business and clarity of purpose, you can create clear instructions in the business strategy for what needs to be done and who is responsible for completing each step.
Core values
A business strategy guides top-level executives and departments about what should and should not be done according to the organisation’s core values. It helps everyone stay on the same page and with the same goals.
SWOT
Stands for strengths, weaknesses, opportunities and threats. This process helps an organisation assess where you are, identify and evaluate your organisation’s strengths and weaknesses, and identify untapped opportunities and threats that you need to mitigate.
Tactics
Many business strategies articulate the operational details of how the work should be done to maximise efficiency. As a result, people responsible for tactics understand what needs to be done, saving time and effort.
Resource allocation plan
A business strategy includes where you will find the required resources to complete the plan, how the resources will be allocated and who is responsible for doing so. In this regard, you will see where you need to add more resources to complete your projects.
Measurement
The business strategy also includes tracking the organisation’s output and evaluating how it is performing about the targets set before the strategy’s launch. This helps you stay on track with deadlines, goals, and budgetary concerns. This will ensure that you can do more of what is working and stop doing what is not working.
Business Strategy Plan
Pitfalls of Creating Business Strategy
Not executing – strategy is a choice; execution is imperative
Do-it-all – Failing to make choices and making everything a priority
What can you execute now with the resources available
Not customer-focused – what’s suitable for customers is good for business
Not agile – Need to adapt and change to market conditions or customer needs and feedback and stay relevant
Something-for-everyone – Attempting to capture all consumer or category segments simultaneously. Be clear and serve one market well
Simple examples of Strategic Goals
Cross-sell more products
Increasing the amount of product sold per customer can increase your average spend. However, even a slight increase can significantly impact profitability without spending money to acquire new customers.
Improve Customer Service
Having customers top of mind in your business can help to deliver quality customer service by building a solid reputation of having exceptional customer service with help more referrals and more sales. If you have a problem in a specific area of servicing your customers, having a goal focused on improving customer service will have objectives that centre around the customer.
Sustainability
You could launch an entire business strategy to increase your business’s sustainability. For example, focus on reducing energy costs, decreasing your organisation’s carbon footprint or becoming more circular. This may also include how you will be more community focus.
Start Creating your Business Strategy
Organisations may feel overwhelmed, time-poor, and unable to work on creating a business strategy. What are the consequences if you do not set a plan? So, start small. Get your whole team together, review your business honestly and assess where you are and where you want to go. Then set clear goals and actions aligned to your vision, purpose and values, including being customer-centric. Ensure you assign accountability for each activity. Make each goal realistic and part of what you do day-to-day and measure, review and act. Stop doing what is not working!
Part of finding your purpose is by knowing what role you can play in changing the world.
Some of it may be the fundamentals of your belief system, some of your journey in life. What you believe and what you want to manifest in the world.
It is essential to be realistic and set priorities, and ask yourself what you want people to say about you as they look back on your life.
One exercise is to write your eulogy and highlight your virtues.
Then determine which values are important and what is not negotiable.
How to find purpose in business?
Finding the purpose in business is very similar.
People want to engage with brands and people that are aligned to their purpose.
Defining a robust and shared purpose for your organisation is vital for business success, and it needs to be more than just building profit.
Business leaders need to have a clear vision for the future and inspire others.
Create a reason for being and to exist, a clear purpose.
Having a strong sense of purpose can define the culture you want in your organisation and guide your decisions.
Purpose sets your compass, a guiding light that gives employees a clear sense of how they should do things every day.
The purpose will make the work more meaningful and fulfil the human need to contribute to something bigger than self.
Some of the questions to ask while determining your business purpose are:
Why did you create your organisation?
What inspired your business idea?
What problem is your organisation trying to solve?
Simon Sinek, in his 2009 TEDx Talk, talks about the three layers to your business story, ‘The Golden Circle:
The What
The How, and
In the centre – The Why
Golden Circle
All organisations know what they do in the products they sell or the services they offer. This is also articulated as the organisation’s Mission statement.
Only some organisations have a clear way of how they do it. The values set them apart from their competition, but few organisations know why they do what they do.
This is because setting a purpose is not about making money. It’s about a belief and the reason why the organisation exists.
He talks about human behaviour and suggests that we talk to the part of the brain that controls feelings and behaviours by communicating from the inside out.
This creates loyalty and sells to people that believe what you believe. The same goes for your employees. They will excel if they believe what you believe.
Having the best minds and most technical people who communicate from the outside in, you will have all the statistics and facts but not the emotion.
People do not buy what you do; they buy why you do it…. Simon Sinek
Organisations must have a clear picture of where they want to head and a future position when they succeed. This can be articulated as the organisation’s Vision.
If everyone in the organisation is aligned to the purpose, it acts as a guiding light and the filter for setting business strategy.
You define your purpose by determining what is important to you and the organisation, and you must make it about the people you want to serve. This cannot be about money.
Then determine the values on how you want to do it.
What are some of the factors to finding your purpose in business?
Involve your team
It is vital that if you are working on your purpose after the business has already been established to involve your team and organise a planning meeting to ask the key questions about your business:
Why do we exist?
What do we do?
What are we great at?
Why do we stand out?
What do people say about us?
Make sure that you are not closed-minded, listen to all the perspectives, and be realistic about your organisation. Sometimes the most valuable insight comes from the people in the front line serving your customers.
Get some external perspectives – this will bring a fresh outlook and objective feedback. Organisations find it helpful to use a consultant to help facilitate the day
Make sure the message is in line and resonates with your customers. Make it customer-centric.
Be inspirational and aspirational. These words will become your compass and will guide your decisions in the organisation
Bring people on the journey. Roll out the message to the entire organisation and public to bring it to life. Align it to everything you do by:
Once you find it make it stick
An organisation’s true purpose is much more than a statement on a wall or website
Your internal behaviour and actions need to be aligned
Your brand and image must be aligned
People need to feel it, touch it and be part of it
What happens once you have found your purpose in business?
Once you have articulated your purpose, it’s time to make it a reality. Build trust and make sure all your team is truly committed and aligned.
Culture eats strategy for breakfast…Peter Drucker
Peter Drucker says that culture is the secret sauce that keeps employees motivated and clients happy. A clear purpose should help create clarity, and executing realistic strategies will boost productivity, performance, and bottom-line success will follow.
So, in my opinion, get your purpose right, determine your value system and set the future aspiration for success, but you must develop some realistic strategies and execute them; otherwise, it’s all a waste of time.
It all matters, Purpose, Vision, Mission, Values, strategy and execution. It’s just a matter of ensuring you set the culture first, then the priorities and then act.
So, the key is to take action and never standstill. Business success is about being able to service the customer of today. This keeps evolving, so it’s crucial that you also set a date to review and assess regularly.
Purpose, Vision, Mission, Values and Strategy Pyramid
