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By miguel-ingles
- In Uncategorized
For a company to properly develop in such a competitive market as the UK, it is essential to evaluate the business rivals, possible work opportunities that nobody covers in the country or those aspects in which the enterprise struggles at. In this article, I will explain the SWOT analysis for companies in the UK.
What is a SWOT Analysis?
The SWOT analysis (whose initials stand for Strength, Weakness, Opportunity and Threat) is a technique used to evaluate the current situation of a company. It identifies and measures external and internal factors that determine its performance. With the results that the analysis show, you can take more precise actions.
Components of the SWOT Matrix
The components of the SWOT matrix are each of the words that are present in the initials:
- Strengths. They gather the advantages, strong points or positions of power that the enterprise has. Some examples are brand solidity, loyalty of the customers or the use of innovative techniques.
- Weaknesses. These elements assess those internal factors that limit or mitigate the performance and competitiveness of a company. They can come from different causes, like taking bad business decisions, lack of awareness or shortages of resources.
- Opportunities. These are those external factors that the business does not control but favour its development and allow it to introduce upgrades.
- Threats. These are external components to the corporation that can risk the realisation of a commercial tactic or the viability of the company. To reduce their effects as much as possible, you should study your competence and the current political, social and economic context.
Why Should You Carry out a SWOT analysis for Companies in the UK?
There are several reasons to carry out a SWOT analysis. In the first place, it permits to evaluate objectively a company. This can help to solve problems that threat it or even to detect possible risks that went unnoticed.
In the second place, it elaborates a report about which business strategies are more adequate for a corporation and which ones damage its performance. Therefore, it facilitates key decision-making for directors.
At last, completing a SWOT analysis is a good way to study the characteristics and expectations of potential customers.
When Should You Carry out a SWOT analysis for Companies in the UK?
It is recommended to complete a SWOT analysis each time a company plans to implement important changes. Some examples would be:
- Opening the business to new markets.
- Modifying the object of the company.
- Merging or associating with other corporations.
- Adopting new business strategies.
- When the market conditions change.
How to Carry out a SWOT analysis for Companies in the UK?
Internal or External Analysis
This is the first step to take when carrying out a SWOT analysis. Internal (weaknesses and strengths) and external factors (threats and opportunities) are analysed separately. This is done in order to identify and separate those circumstances that depend on the company from those that do not.
Some of the measured internal factors are those related with production, human resources, finances or marketing. On the external components side we can find the market, the customers, the competence and the professional environment.
Impartial and Compared Analysis
It is essential to assess impartially and objectively the situation of a business. Its directors usually underestimate the threats and weaknesses and overvalue strengths and opportunities.
On the other side, it will be easier to notice the relevant components of the SWOT matrix when comparing your enterprise with rival businesses.
Strategies to Implement
Depending on the results of the SWOT analysis, the directors can introduce some strategies or others. You can divide them among four groups.
- Offensive tactics. This is the best-case scenario. Therefore, you take advantage as much as possible of the strengths of the business and the opportunities the market offers.
- Defensive tactics. You use them when the business has several strengths, but some external threats arise.
- Reorientation tactics. They try to use new opportunities to fix the weaknesses of a corporation.
- Survival tactics. This is the worst-case scenario. As a result, you will try to solve the threats without creating new weaknesses.
In this webpage, you can find some examples of SWOT analysis in different business sectors.
In ukstartcompany, you will find information about how to establish, register and operate companies with different legal structures and business activities in the UK.