When you perform a SWOT analysis you assess the strengths, weaknesses, opportunities and threats to a business, both internally and externally. The opportunities that you identify in your analysis should be exploited for your business's advantage.
Strengths and weaknesses are internal aspects of the business that you can change and control, such as product quality, employee ability and specialized knowledge. The difference between a strength and a weakness is whether it gives your business an advantage or places you at a disadvantage. Opportunities and threats are external market conditions, like changes is consumer demand, the economy or demographics.
Opportunities are an external situation that your business can take advantage of. For example, an increase in average household spending could present an opportunity to sell more consumer goods; an increase in the number of births could present an opportunity for products and services aimed at young children like toys, care products and preschool programs. Identify potential opportunities by looking at market data from your own research or from publicly available sources.
An opportunity alone is not enough for a business to succeed. To take advantage of an opportunity, you need to have a corresponding strength. After assessing both your strengths and opportunities, look for ways you can pair them together. For example, if your company's strength is excellent product development skills, you might pair those skills with an opportunity to develop a product for an emerging customer base.
The recommendations of a SWOT analysis should stem primarily from the connections identified between strengths and opportunities. For instance, if your company offers exemplary customer service, you can develop a marketing campaign to target customers seeking better customer service. Where strengths are lacking, you can also recommend developing certain strengths to take advantage of opportunities.
