Analyzing your business in terms of strengths, weaknesses, opportunities and threats is referred to as SWOT analysis. Many companies use it to assess these four aspects of the business to ensure they keep their competitive edge. Typically, a team of people representing the key areas of operation get together and have a brainstorming session, guided by some basic questions that help get the ball rolling.

Strengths

A discussion about strengths begins with some or all of the following questions that may vary depending on your specific business.

• What does the company do well?
• What are the company’s best intangible assets, such as knowledge, reputation, skills or education?
• What are your best tangible assets, such as patents, customers, equipment or technology?
• What are your competitive advantages?

After brainstorming about these questions, ask them again, but from the perspective of your competitors. What do they think you are especially good at? Consider why the answers may differ depending on the point of view.

Weaknesses

This discussion works the same way as with strengths. Begin by asking the following questions:

• What processes need improvement?
• Are there skill gaps on your team?
• Is your technology behind the curve?
• What do others outside the company see as your weaknesses?

Some of what you discover during this process may be unpleasant, but the process is more productive when you are honest about the answers to these questions.

Opportunities

Again, begin the brainstorming session by answering questions about your company’s opportunities.

• Are there ways to increase your market share?
• Is there a segment of your customer base that is being underserved?
• Are there any networking events you should attend?
• Should you add a product or service line to your current offerings?

This may be the most exciting part of the discussion, and it may stimulate many new ideas for growing your business.

Threats

In this section, you will want to look both inside and outside your organization.

• Are any key employees considering going elsewhere and taking their knowledge with them?
• What type of threats do your weaknesses make you vulnerable to?
• What is your competition doing that might result in your loss of market share?
• Is consumer behavior changing?

SWOT analysis is an excellent way to help you look at your company with a critical eye to discover how to get ahead of the competition or increase your market share. Strengths and opportunities are probably more pleasant to talk about than weaknesses and threats, but answering the questions honestly will provide the best results.