How SWOT Analysis can help Startups in decision making
Strengths and Weaknesses are internal factors, Opportunities and Threats are the external factors for the scrutiny. These elements help to evaluate a business venture.
SWOT Analysis is a structured planning method for analysing Strength, Weakness, Opportunity and Threats. Strengths and Weaknesses are the internal factors, while Opportunities and Threats are the external factors for the scrutiny. These elements help to evaluate a business venture. Entrepreneurs should constantly have a look to understand the effect of these factors on business. They should focus more on value of customers, which would ultimately help in growth of the company. The company should use such analysis to add value to a product, attract new customers, maintain good relationship with loyal customers and extend its services efficiently over the long term.
Simple rules for successful SWOT analysis:
- Strengths: A startup should thoroughly prepare its Strength analysis so as to examine and implement business procedures. An overview discussion of the product or service should be done under this analysis. Startups should focus on quality procedures and specialize in marketing expertise.
- Weakness: Most startups should focus on improving the product and bringing in innovations from time to time .This can be a Weakness for most of the Startups, as many find it difficult to about any changes in the product/service. The marketing team is so engrossed in promoting the product, that they avoid the weaknesses and changes to be brought in their product.
- Opportunities: There is always room for improvement in a startup. Few changes and analysing current issues will help a startup to achieve stability. Startups will have to focus on Opportunities coming their way to strengthen their product quality.
- Threats: Threats for startups could be a new competitor in your home market, price war, an innovative product similar to yours by a competitor, competitors having superior access to channels of distribution etc. You should be able to tackle this by making some back up strategies in your planning phase itself.
Startups need to focus on future growth and also distinguish where the organization is today. They need to keep in mind their competitors, while conducting SWOT Analysis. Startups may face steeper competition in later stages as well as unique challenges. However, the level of dedication by the founder and his team will ultimately determine the startup’s success.
- Startups should conduct Strength, Weakness, Opportunities, Threats Analysis from time to time.
- SWOT analysis helps startups to focus more on value of customers, ultimately helping the growth of company.
- SWOT analysis will help startups to differentiate between current and future status of the company.