SWOT (strengths, weaknesses, opportunities, and threats) analysis is a key tool you can use to analyze your business and develop strategies for business growth and success. Although this process is relatively quick, it should be conducted regularly, at least every three to five years with more frequent reviews. This is how you conduct and use your SWOT analysis.

Evaluate Your Internal Strengths and Weaknesses

Look at what your company does well. Search for financial strengths, low costs, innovations, intellectual property, brand reputation, product quality and variety, corporate culture, marketing, and online presence advantages. You may even include key personnel, partnerships, or internal processes. Look over your entire process to identify all your strengths.

Then, review your weaknesses. Check for excessive debt, outdated or damaged equipment, lack of expertise in some areas, agility challenges, customer dissatisfaction, high turnover, and any other challenges you face internally.

The key to getting an accurate accounting of your internal strengths and weaknesses is to involve individuals at every level and in every department of your company.

Analyze Your External Opportunities and Threats

Opportunities may include expanding to new markets, riding favorable trends, positive regulation changes, or trade agreements. These are external circumstances that could place your company in a better position, encouraging growth.

Your external threats create obstacles to your growth. Look for increased competition due to new trade agreements, supply chain challenges, reductions in your target market, reduced workforce, unfavorable regulatory environments, and ESG initiatives.

Build Your Strategies

Now, you can use this analysis to build your business strategies. Look at your internal strengths and weaknesses. How can you leverage your strengths into a competitive advantage? Can you improve your weaknesses to gain additional advantages, or should you outsource some of these tasks?

Then, review your opportunities and threats. What opportunities can you take advantage of right away? What can you do in the short term and long term? As you review your threats, search for ways to overcome them. How can you reduce your barriers, competition, and compliance requirements? Some threats you may not be able to address fully, but you can implement strategies that reduce them.

The goal is to mitigate risk and find ways to reduce costs while increasing revenue. Therefore, consider the costs of implementing these strategies and whether they will pay off over time.

Your SWOT analysis is a key part of your strategic planning process, so don’t forget this step as you are reviewing and developing your corporate strategies.