Prior to developing any plan to grow your business, and that growth comes to fruition, it’s critical to garner a realistic picture of the present status. There are a lot of simpler ways for determining this which helps improve the clarity of the information you’ll need. Your collected data can reveal both strengths as well as weaknesses, while displaying a broad overview of current (and potentially future) market trends (and forces) that affect the business. This actually, is one of the prerequisite steps, towards business growth.
SWOT analysis is among the most commonly used breakdowns. In this process, you organize a four-sectioned grid / chart, containing four headings: Strengths, Weaknesses, Opportunities, and Threats. Strengths and Weaknesses are internal business facets while Opportunities and Threats pinpoint the market forces, trends, and any other external business elements. By adding gathered data to each section of your SWOT grid, you can easily spot, and consider the challenges affecting your business.
SOAR – The Positive SWOT
SOAR is very similar to SWOT, however it provides a more positive leaning analysis. SOAR identifies Strengths, Opportunities, Aspirations, and Results. Much the same as SWOT, again, information is provided under each section. This also helps provide an insightful overview of the business as well as the market you’re working in.
Because SOAR focuses on the positives, this might not necessarily provide the best (clearest) business state overview. On the other hand, advocates of using this analysis method, suggest it’s more useful because “negative” facets are reworked into “challenges” and “opportunities”. This may be of extra benefit, in that people most often respond better to positive motivation (instead of negatively driven issues). Here’s the rub though… Use both (SWOT and SOAR). Why? SOAR stages a “growth for the future” perspective, while SWOT presents a “what’s happening now” perspective.
PEST – A Look at the Outside World
PEST is another related technique which spotlights the market (as well as other external things). While you evaluate SWOT (internal and external elements), PEST focuses alone on the external. PEST is: Political, Economic, Social, and Technological.
The PEST breakdown provides an overview of trends across markets, things such as government regulation, technological changes like using Artificial Intelligence (AI) or robotic automation, shifts in health and lifestyle perspectives, even financial / currency exchange rates, etc. There is an addition to to the PEST analysis: PESTLE, which includes two additional factors. Legal, and Environment.
SCOPE is very similar to SWOT, as essentially it’s the same, but with an additional fifth element that considers your strategic business development. SCOPE is: Strengths, Core Competencies, Obstacles, Prospects, and Expectations. It looks at your present business position along with the internal and external considerations. In using this method, the focus is forward looking towards your business growth, by determining your prospects and expectations.
Porter’s Five Forces – Focus on Competitors
Finally, when reviewing your market, especially your competition, Porter’s Five Forces is a valuable tool. It’s a bit of a more involved type of analysis, as it considers your five market forces. They are: Supplier power, buyer power, competitive rivalry, threat of substitution, and threat of new entry.
Again, you’d gather information and chart it for review later. Quite literally, you ponder and come up with items in each of the five categories, then add your considerations / findings to the chart. The charted entries provide an overview of market challenges (affecting you) from other businesses.
All of these tools are useful, and critical to use! Most especially for any business that needs to grow. Analyzing your business, as well as the market you serve, is very important because you need pause and look at the “big picture” of your entire business environment. This way you will be able to see better, and can move in better directions. Don’t stick with one or two, use all of the tools, doing so provides a more robust focus!
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