Why SWOT is Important to a Business’ Growth

Writing down your business plans and strategies help to align the company’s goals

Why SWOT Is Important To A Business’ Growth

To have a clear strategy is important for a business or an organization to see where they are standing, the destination they are heading to and the path to take. A clear goal adhered with a good strategy is the top-notch key to a successful business.

The concept of business strategy is as simple as if you can see where you need to go; you got to have a plan on how to reach the destination.

The process of generating, and selecting the right strategy can be a long process hence it is important for a business to fully understand what they are doing, and have a clear picture of themselves internally and externally to produce an effective strategy.

SWOT Analysis

SWOT analysis

Why SWOT is important to a business’ growth?

The SWOT matrix is a way of strategizing, which involves identifying the elements of Strength, Weaknesses, Opportunities, and Threats.

These key elements are the important factors to help business owners analyze and evaluate themselves before making any decisions.


This category requires the business to analyze the advantages they currently have, that the others don’t. The advantages focus on the characteristics of the business, mainly the internal strength that the business acquires, which makes them better than the competitors.

Simple examples of business’s strength are good morale of the employees that are making the teamwork and working condition super conducive and enhance productivity.


In this category, observation and evaluation are on the characteristics that are causing business disadvantages, mainly referring to the internal flaws of the business.

For instance, the business has no website and do not adopt the online platform, can be deemed as a weakness. In view that all your competitors are making their way to the internet and setting their own sales website.


Opportunities, on the other hand, refer to the advantages the business has that come externally, further define as things that are favourable to the business which enhances the operation and contributes to the outcome.

A very simple example is the opening of a university near a coffee shop which contributed to the significant increase in the sales and revenue of the shop.


The opposite of opportunities, threat refers to the disadvantages the business has to face from the external sources. Unlike weakness, this can be further defined as an uncontrollable factor.

As an illustration, the threat of a bookshop can be the change in preference of the younger generation towards digital and online books.

How Businesses Can Benefit From Using SWOT?

SWOT analysis is able to assist businesses on how they can improve themselves

As mentioned earlier, SWOT analysis is a way of strategizing your business. It is easy to set a goal and see where you’re heading to, but it is also important to pave the way to your desired goal.

Hence, a good strategy that considers all the possible outcomes and utilizing every strength and opportunity is critical.

The SWOT analysis helps a business understands itself better, and see the overall view of what you currently have, and where you’re lacking.

Furthermore, the SWOT analysis can help business in setting its own goal too. From analyzing the strength, weaknesses, opportunities, and threat, the business can see a clear direction of where they shall head to.


For instance, a local book store that has no current business goal, and obviously no strategy to enhance their revenue, is operating by selling all types and categories of books.

Illustration of the SWOT analysis for the book store

From the SWOT analysis, the book store is able to identify their strength, weakness, opportunities and threats.

The biggest factor that shall make a turning point to the business is the opportunities they have which are their strategic location near a local university and a high school, meaning that most of their customers are students.

On the other hand, the strength of the book store is the hangout corner that comes with a self-service coffee machine, which can be a place for students to chill and enjoy a cup of coffee while looking for books and stationeries.

The book store can improve their business by digitalizing their book inventory and setting up a website, which would provide better convenience for the student to look up for books.

Upgrading works with the WIFI connection can be done as well, to provide additional attractions to the students hanging out at the book store.

For the threat, the improvement the book store can do is in terms of the appearance and the layout of the store so that it would be as conducive and calming as the newly opened coffee shop. As this is something beyond control, they can only do enhancement to be as great as the competitors.

The book store can see their goal and focus on educational and reference books. Hence they can strategize their business by selling books that are keen towards university and high school student’s preferences.


A strategy is crucial for a business to see its clear vision of where to focus and emphasize

To have a strategy is crucial to see a clear vision of where to focus and emphasize. The SWOT analysis would be some ways you can use to strategize your business, among other methods of strategizing.

Nevertheless, before you aim your goal, it is best to take a step back and evaluate your business’ Strength, Weaknesses, Opportunities, and Threats. That is why SWOT is important to a business’ growth.

Melissa Chan

A die hard coffee fan who enjoys reading European histories, a chatter box and will drive people nuts for non-stop talking!

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