What Is A SWOT Analysis? How To Make One For Your Business (Plus A Free Template)

Summary

This video by Stephan, a seasoned Shopify e-commerce designer, introduces SWOT analysis as a critical tool for businesses to identify strengths, weaknesses, opportunities, and threats. It outlines a six-step process for conducting a SWOT, emphasizing the importance of collaboration and unbiased perspective. The video also provides practical examples for a small candle business and suggests leveraging SWOT for strategic planning and growth, highlighting the value of regular analysis and customer engagement for competitive advantage.

Takeaways

• 📈 SWOT Analysis is a tool for businesses to identify their strengths, weaknesses, opportunities, and threats, aiding in strategic planning and growth direction.
• 🔍 A SWOT matrix is typically a two-by-two layout that helps organize the analysis into these four categories.
• 🤝 Stakeholder involvement is crucial for a comprehensive SWOT analysis, including founders, team leaders, and representatives from various company aspects.
• 💡 Brainstorming sessions with team members can generate new perspectives and ideas, enhancing the SWOT analysis process.
• 📝 Listing strengths and weaknesses involves identifying internal factors that affect business performance, which should be controllable and realistically assessed.
• 🌐 Opportunities and threats are external factors that can influence growth, requiring prioritization based on their impact and manageability.
• 🛠️ Applying the SWOT analysis results helps in taking informed actions that leverage strengths, opportunities, while mitigating weaknesses and threats.
• 🕯️ The example of a small handmade candle business illustrates how to identify specific strengths like unique selling propositions and weaknesses such as high ingredient costs.
• 📈 Opportunities for the candle business include leveraging market trends, new tools, and increased demand for stress-relief products.
• ⚠️ Threats to the candle business could be ingredient cost increases, price undercutting by competitors, and changes in retail laws.
• 🔄 Regular SWOT analysis helps in staying updated with industry trends and maintaining a competitive edge by understanding and adapting to the market environment.

Q & A

What is a SWOT analysis and why is it important for a business?

A SWOT analysis is a strategic planning tool used to identify and analyze the Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning. It's important because it helps businesses understand their internal capabilities and external factors that can impact their performance, enabling them to make informed decisions and strategies.

What does the acronym SWOT stand for?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. These are the four areas that a SWOT analysis focuses on to evaluate a business's position.

How can a SWOT analysis be used in various business scenarios?

A SWOT analysis can be used in a variety of scenarios such as developing a business strategy, identifying a direction for growth, product development, and more. It helps in understanding the business's competitive advantage and areas of improvement.

What is the purpose of a SWOT matrix?

The purpose of a SWOT matrix is to organize the findings of a SWOT analysis in a structured way, typically displayed as a two-by-two layout, allowing for a clear visualization of the business's internal strengths and weaknesses versus external opportunities and threats.

Why is it recommended to involve multiple stakeholders in a SWOT analysis?

Involving multiple stakeholders ensures a diverse range of perspectives and insights, as different individuals within and outside the company can provide valuable input from their unique vantage points, leading to a more comprehensive and unbiased analysis.

What is the significance of a brainstorming session in the SWOT analysis process?

A brainstorming session is significant because it encourages team members to collaborate, share ideas, and build on each other's thoughts, fostering creativity and leading to a more thorough identification of strengths, weaknesses, opportunities, and threats.

How should a business approach listing its strengths and weaknesses during a SWOT analysis?

A business should approach listing its strengths and weaknesses by identifying internal factors that positively or negatively affect performance and are within their control to change. It's important to be realistic, unbiased, and concise in this step.

What differentiates opportunities and threats from strengths and weaknesses in a SWOT analysis?

Opportunities and threats are typically external factors that can either lead to growth or pose challenges to the business, and are usually out of the company's control. In contrast, strengths and weaknesses are internal factors that the company can influence or change.

How can a SWOT analysis be applied to future business goals and strategies?

A SWOT analysis can be applied to future business goals and strategies by using the insights gained to prioritize tasks, build on strengths, minimize weaknesses, capitalize on opportunities, and mitigate threats, thus providing a roadmap for strategic decision-making.

What is the role of a post-purchase survey in leveraging an existing customer base after conducting a SWOT analysis?

A post-purchase survey helps gather valuable feedback from customers, which can provide insights into areas for improvement or confirmation of strengths. It can also increase customer retention by making customers feel valued and offering incentives for their input.

How often should a business conduct a SWOT analysis?

A business should conduct a SWOT analysis regularly, perhaps once or twice a year, to stay updated on the industry trends, assess their competitive position, and ensure they are addressing their weaknesses and building on their strengths effectively.

What is the benefit of using a SWOT analysis template provided in the video?

Using a SWOT analysis template can streamline the process, provide a clear structure for organizing thoughts, and serve as a reference point for team members who may not know where to start, ensuring consistency and thoroughness in the analysis.

Outlines

00:00

📈 Introduction to SWOT Analysis

This paragraph introduces the concept of SWOT analysis, emphasizing its importance in identifying a business's strengths, weaknesses, opportunities, and threats. The speaker, Stephan, shares his experience in e-commerce and invites viewers to subscribe for more business growth tips. He explains that SWOT can guide strategy development, growth direction, and product development. The paragraph also outlines a six-step process for conducting a SWOT analysis, starting with creating a SWOT matrix and gathering stakeholders, followed by brainstorming, listing internal and external factors, and applying the findings to business goals.

05:01

🔍 Deep Dive into SWOT Components

The second paragraph delves deeper into the components of a SWOT analysis using the example of a small handmade candle business. It discusses how to identify strengths such as unique selling propositions and loyal customer bases, and weaknesses like high ingredient costs and lack of marketing. The paragraph also explores opportunities, including market growth trends and the popularity of certain scents, and threats such as increasing competition and regulatory changes. The speaker advises on leveraging new technologies and emphasizes the importance of a strong customer base for e-commerce success.

10:01

🛍️ Taking Action with SWOT Insights

The final paragraph focuses on the application of SWOT analysis findings. It encourages businesses to use the insights gained to take action and build on their strengths while addressing weaknesses. The speaker suggests regular SWOT analysis to stay updated with industry trends and competitive positioning. The paragraph also touches on the time investment required for SWOT analysis and offers alternatives like outsourcing to a Shopify expert or leveraging customer feedback through surveys. The goal is to foster a sense of humility and continuous learning, ensuring businesses are always looking for new ways to improve and grow.

Keywords

💡SWOT Analysis

SWOT Analysis is a strategic planning tool used to identify and analyze the Strengths, Weaknesses, Opportunities, and Threats related to business or project. In the video, it is the central theme, providing a structured approach to understand a business's competitive position. The script mentions a six-step process for creating a SWOT analysis, emphasizing its importance in building on strengths and correcting weaknesses for future business goals.

💡Strengths

Strengths refer to the internal positive attributes of a business that give it an advantage over competitors. In the context of the video, the speaker uses the example of a small handmade candle business, highlighting strengths such as local production, loyal customer base, unique product offerings, and premium ingredients.

💡Weaknesses

Weaknesses are internal factors that negatively impact a business's performance. The video script illustrates this with the candle business example, pointing out weaknesses like high ingredient costs, expensive shipping for delicate items, lack of employees, and minimal marketing efforts, which hinder growth and outreach.

💡Opportunities

Opportunities are external factors that a business can leverage to grow or improve its market position. The script describes opportunities such as market growth trends for candles, leveraging new organic tools, and the rising popularity of certain scents, which can be used to expand market share and increase revenue.

💡Threats

Threats are external factors that could potentially harm a business's growth or performance. In the video, threats to the candle business include increasing ingredient costs, competitors undercutting prices, a low barrier to entry in the industry, and changes in local retail laws, which can limit growth opportunities.

💡Stakeholders

Stakeholders are individuals or groups that have an interest in the business, such as founders, team leaders, and third-party providers. The video emphasizes the importance of involving stakeholders in the SWOT analysis process to gather diverse perspectives and ensure all relevant opinions are considered.

💡Brainstorming Session

A brainstorming session is a creative problem-solving technique where team members generate ideas collectively. The script suggests hosting such a session to identify the business's strengths, weaknesses, opportunities, and threats, leveraging the collaborative energy and diverse viewpoints of the participants.

💡E-commerce

E-commerce refers to the buying and selling of goods or services using the internet, and the technologies that facilitate online transactions. The video discusses various aspects of e-commerce, such as transactional journeys, shipping, and the use of platforms like Shopify to set up online stores.

💡Unique Selling Proposition (USP)

A Unique Selling Proposition is a marketing term for a distinct reason why a product or service should be purchased. In the video, the candle business's USP is its locally made, quick-to-produce candles and a loyal customer base that actively promotes the products.

💡Market Trends

Market trends refer to the general direction in which a market is developing. The script mentions the growth trend for candles and the increasing popularity of certain scents, which are examples of market trends that can be identified and capitalized on through a SWOT analysis.

💡Customer Retention

Customer retention is the ability of a business to keep its customers over time. The video suggests using post-purchase surveys and offering incentives as strategies to increase customer retention, which is crucial for maintaining a strong customer base.

💡Shopify

Shopify is a subscription-based e-commerce platform that allows businesses to set up online stores and sell products or services. The video promotes Shopify as a tool for simplifying business operations and mentions its features like Shop Pay for improving the checkout experience.

Highlights

A SWOT analysis is essential for identifying a business's strengths, weaknesses, opportunities, and threats.

SWOT can be applied to various business scenarios, including strategy development and product development.

The process of creating a SWOT analysis involves six steps, starting with a SWOT matrix.

Stakeholders, including company founders and team leaders, should be involved in the SWOT analysis.

Brainstorming sessions are crucial for gathering diverse perspectives on a business's SWOT factors.

Strengths and weaknesses are internal factors that can be controlled and should be listed clearly.

Opportunities and threats are external factors that can influence business growth and must be prioritized.

The SWOT analysis should be used to take action with confidence, leveraging identified scenarios.

A small handmade candle business example is used to illustrate the application of SWOT analysis.

Strengths of a business can include unique selling propositions and loyal customer bases.

Weaknesses may involve high ingredient costs, shipping expenses, and lack of employees or marketing.

Opportunities can arise from market trends, new technologies, and changes in consumer behavior.

Threats can come from increased costs, competition, industry shifts, and regulatory changes.

Regular SWOT analysis helps in understanding the e-commerce industry and positioning against competitors.

Outsourcing SWOT analysis to a Shopify expert or consultant can provide an unbiased perspective.

Leveraging customer feedback through post-purchase surveys can enhance the SWOT analysis process.

A SWOT analysis encourages humility and a fresh look at business operations from different angles.

The video concludes with an invitation to start a business on Shopify with a free trial.

Viewers are encouraged to subscribe to Learn with Shopify for weekly actionable tips on e-commerce growth.

Transcripts

No matter what industry you're in a successful business, knows

how to built on its strengths and correct its weaknesses.

But how can we go about identifying what we're doing right as a

business and what we can improve.

That's where a SWOT analysis comes in.

In this video I'll be showing you what a SWOT analysis is, how

to go about creating one and how to apply its benefits to future

business goals and strategies.

Also don't forget the reference to free template in the link below.

She can work a lot with me and apply your learnings,

after you watched this video.

Hi, my name is Stephan, and for the last seven plus years,

I've been designing e-commerce experiences on Shopify, working

with industry leading brands, such as Nestle Canada, Unilever

Global, as well as local small businesses, making a huge impact.

Welcome to Learn with Shopify, where we give you the skills and

knowledge that you need to start and grow a successful business.

So make sure to hit that subscribe button, so you

never miss an episode.

For those who aren't too familiar earlier with the acronym SWOT, it

stands for strengths, weaknesses, opportunities, and threats.

It can be used in a wide variety of cases, including developing a

strategy, identifying a direction of growth for your company

or even product development,

just to name a few.

A SWOT analysis aims to discover what your business is doing better

than your competitors, or maybe what your competitors are doing

better than yourselves identifying opportunities and how to maximize

them as well as reacting to external environment changes.

When you invest the time in organizing a SWOT analysis, you'll

have the confidence in prioritizing future tasks, knowing that you're

building on your strengths, and minimizing your weaknesses.

Here's the six step process I commonly see taken when

creating a SWOT analysis.

Number one, start off with a SWOT matrix.

Luckily for you, we've prepared a template on your behalf.

A what matrix is displayed in different ways, but commonly

seen as a two by two layout.

Number two, gather your stakeholders.

SWOT analysis isn't meant to be done alone.

In fact, I strongly recommend to have the company founders and

team leaders heavily involved.

Also try to select people who can represent different

aspects of your company.

Like a third party shipping provider, or maybe an

outsource customer support rep.

Everyone that's involved in your businesses' opinions' count.

Number three, host a brainstorming session.

Bring together your team members and host a brainstorming session.

Team members feed off each other's energies and new perspective

through casual discussions.

So take the time to be collaborative.

If your team doesn't know where to start, reference

the example in the free SWAT analysis template provided.

Number four: list your strengths and weaknesses.

Both strengths and weaknesses should be identified as internal

factors, that affects how your business performs in

the positive and negative way.

These internal factors should be in your control to change.

I personally always find this step difficult, not to be biased.

But try to take a step outside of your mindset and

be as realistic as possible.

Make sure to keep your points short and simple.

And remember having more than one person assisting you will

allow you to feel less biased.

Number five, list your external opportunities and threat.

In comparison to strengths and weaknesses, opportunities

and threats are typically external factors.

They're usually out of your control and can either be a

pathway of growth or slow you down.

And keep in mind, markets change quickly, and competitors may

neutralize what was an opportunity.

So try to identify what opportunities and threats

are easiest to tackle and prioritize first.

And then you can make the most impact with the least

amount of effort required.

Number six, put your SWOT analysis to use.

Once you're done, you can start taking action with

confidence knowing you and your team have identified all

of the positive and negative scenarios for your future goals.

Now that we've reviewed the process of developing our SWOT analysis,

let's break down strengths, weaknesses, opportunities,

and threats, in more detail.

And let's also pretend I'm a small handmade candle business

with a growing customer base, creating a SWOT analysis on

improving my businesses' growth.

Strengths.

What do you do better than others in your industry?

What is your unique selling proposition and why is it

better than your competition?

Now in the case of my small business, my strengths are

one: locally made candles that are quick to make and fulfill.

Two: a loyal customer base that promotes my products

on social channels often and purchases my products repeatedly.

Three: the most review Toronto-based Palo

Santo scented candles.

Number four: a handmade one-of-a-kind candle

with premium ingredients.

Now other popular e-commerce related examples are: cheaper

shipping than other merchants, a better return system, or even

a quick and easy end-to-end transactional journey.

Weaknesses.

What are negative internal factors that are causing your

business to underperform?

What weaknesses are hurting my operation performances and

or cause financial losses?

Now in the case of my small business, my weaknesses are

one: higher ingredients costs mean fewer candles options

due to inventory costs.

Two: delicate and bulky goods are expensive to ship.

Three: lack of employees to delegate work hinders the growth

and outreach opportunities.

And four: little to no marketing causing a lack of new customers.

Other common e-commerce related examples are lack of funding

for new inventory growth.

However, luckily you have Shopify capital that can be

a great solution to easily fund new initiatives based

off your current growth.

Or maybe security and fraud concerns.

Meaning some people are still reluctant to use their credit

cards online, but luckily choosing Shopify payments or other third

party gateways can really help mitigate and blunt this concern.

Opportunities: whether external opportunities that can empower

your business in a positive way, opportunities are usually out

of your control, but leveraging them can help generate more

revenue, expand market size and share and achieve extra growth.

In the case of my business, the opportunities are one: the

growth trend for candles has grown 20% in search results

in comparison to last year.

Two: leveraging new organic tools like Pinterest and Google

shopping will compliment the increase in new search results.

Three, the Palo Santo scent has been growing in popularity,

which is one of my most popular.

Number four: with more people working from home,

the need to de-stress candles sense are on the rise.

As a vintage Shopify expert, one of my favorite questions

you should always be asking when identifying opportunities are

what new technologies can help me grow by business and get the

advantage over my competitor.

Now new technologies and features have helped level

the playing ground field for traditional retailers.

For instance, improvements in the checkout card experience with

shop pay have created a quicker, smoother, and more customer

friendly shopping experience.

Threats.

What are factors that can affect or hurt the business by limiting its

opportunities to grow or expand?

Threats can also arrive from several sources, some internal,

but typically external.

For my candle business, the threats are one: increases in ingredients

costs can cause upward pricing.

Two, competitors with similar sense are undercutting my prices.

Three, with a low barrier of entry of the artismal candle

industry, new brands and existing competitors can mimic

my business model or products.

Four, changes in local retail laws can impact my businesses' sales.

Now keep in mind you should always be looking for a

broad industry shift that might affect your growth.

These include legal and regulatory changes.

A common thread I typically see is a low-barrier of entry as

constant threatened e-commerce.

With majority of e-commerce brands powered by Shopify, it's easy to

set up an e-commerce business.

Merchants can even sell items on Facebook and eBay without even

setting up their own website.

That's why focusing on building a strong customer

base is extremely important in any stage of your growth.

Using a SWOT analysis on a regular basis, perhaps once or twice

a year, will give you a broad overview of the e-commerce industry

trends, show you where you stand in relation with your competitors and

provide you insight into mitigating your weaknesses and making sure

you're building on your strengths.

Let's be honest, a SWOT analysis takes a good deal of time.

While you can do it yourself with your team, you can also

outsource these tasks by one, finding a Shopify expert

consultant who will have more of an unbiased perspective.

I'd recommend finding a Shopify expert under the "Expert Guidance"

subcategory that will give you the most bang for your buck.

Or two, leverage an existing customer base by adding a

post-purchase survey, using a tool like Enquire or embed a link on

your Shopify order confirmation email to a third-party like

Typeform and even offer incentive, like "get 10% off your next order".

It can really maximize your impact for your survey and

increase customer retention.

By the end of your SWOT analysis, you should start

feeling a sense of humbleness.

You may think you already know everything that you need to do

to be successful, but a SWOT analysis will force you to

look at your business in new ways and from new directions.

You'll look at your strengths and weaknesses and how you can

leverage those to take advantages of the opportunities and threats

that exist in your market.

So after reading your SWOT analysis, what's next?

Start building your business, using a free trial on Shopify.

Shopify is a subscription-based software that allows anyone

to set up an online store and sell products or services.

It's powerful, easy to use and really simplifies

running your business.

Click the link right here to claim your free trial now.

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Leave your questions in the comments below, and I'll try to get

back to each and every one of you.

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