A SWOT analysis is a must for fashion entrepreneurs. Wikipedia defines it as a strategic planning technique that helps you to identify key elements of your brand when you are making plans and decisions.
It helps you see your business with new eyes and develop better strategies. It is also a lot more fun than it looks, not nearly as hard as it seems and doesn’t take up too much time. So, whether your fashion business is a startup or an existing business, you must take out some time for a SWOT analysis. But, first, what exactly is a SWOT analysis?
What is a SWOT Analysis?
The acronym S.W.O.T stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is a business technique used to evaluate your business’ strengths, weaknesses, opportunities, and threats. As a fashion entrepreneur, a SWOT analysis should help you to develop a full understanding of all the factors involved in making a business decision.
The purpose of a SWOT analysis is to determine internal and external factors that influence your business’s successes and shortcomings. Strengths and weaknesses are internal to your brand and you can change them over time. Opportunities and threats are external to your brand and are out there in the market. You cannot change them.
With the information from your SWOT analysis, you can make informed decisions for your fashion business. You also get to understand your brand’s competitive position and develop good business plans. Therefore, it is advisable to perform a SWOT analysis before you commit to big decisions for your brand. It is also wise to perform it annually.
How to Conduct a SWOT Analysis
1. Create a SWOT analysis template
Before starting on your SWOT analysis, it will be great to create a template for it. This template helps you organise your thoughts properly and keep your information clear. Typically, the template people use is a 4-quadrant square diagram. Label each of the squares following the S.W.O.T acronym with strengths in one square, weaknesses in the next and so on.
Afterwards, write out elements of your business under the corresponding heading. This makes it easier for you to see everything clearly. You can also use a 4-column table as opposed to the square and list your points in the rows under each column heading. Use whatever method makes organising and understanding your analysis easiest for you.
2. Involve others
You, as the fashion entrepreneur, cannot analyse your business alone. Other people are also involved in your business and they should have a say too. Sometimes, they can reveal to you strengths, weaknesses, opportunities, and threats you didn’t see.
So, gather information from the different stakeholders in your business when performing your SWOT analysis. This includes management, your employees in various teams and even your customers. All of these different groups of people will have different perspectives on your brand. Even your employees in various departments say production, sales, customer service, will bring different opinions to the table.
Not only will these perspectives make your analysis successful, but, they will also make it easier to implement. When your employees are part of the process, they tend to be more dedicated to taking action. They will be more willing to improve on something if they are part of the decision-making process.
3. Use the results of your analysis
Once you have the answers to your SWOT analysis, the next step is to take action. List out all your points in each category with the points of the highest priority at the top and lowest priority at the bottom. You can then use them to develop short-term and long-term strategies for your fashion business.
From your list, you can find ways to use your strengths to maximise your opportunities. Also, find ways to use those strengths to minimise your threats. You should also determine how to use your opportunities to minimise your weaknesses and avoid threats. All in all, use this new information to make changes to your fashion brand.
Elements of the SWOT Analysis and Questions to Ask in SWOT Analysis
To successfully conduct a SWOT analysis of your fashion business, you need to first answer certain questions honestly. These questions help you see your business clearly.
Your business’s strengths explain in what areas your fashion brand excels and what separates it from the competition. They could be tangible or intangible and are internal to your business. Strengths could include a strong brand, valuable employees, loyal customer base, original products, or a strong balance sheet.
Some questions to ask to determine your business’ strengths include;
- What do we do well?
- What advantage do we have over our competition? What do you do better than others?
- What’s our unique selling proposition?
- What do our customers love about our company or product(s)?
- What business processes are successful?
- What assets do we have ‘(tangible and intangible)?
Your weaknesses are things that limit your business in any way from being the best it could be. They take away from your strengths and prevent you from overtaking your competitors. They are areas you need to improve on. They could include a weak brand, low profits, high turnover, high levels of debt, or lack of capital.
Some questions to ask to determine your business’ weaknesses include;
- What does our business lack (for example, expertise or access to skills or technology)?
- What business processes need improvement?
- What do our customers dislike about our company or product(s) (from negative reviews)?
- What gaps do we have on our team?
- What products are underperforming?
- What tangible assets does our company needs, such as money or equipment?
Opportunities are external factors that could give your business a boost. They are things you can take advantage of in the market to make your fashion brand more competitive. They make it possible to increase sales, attract new customers and be an overall better brand. They could include a lack of competition, market growth, or high demands for your products.
Some questions to ask to determine your business’ opportunities include;
- What opportunities exist in our market or the environment that we can benefit from (trends, regulations, technology, etc)?
- What kind of messaging resonates with our customers?
- Which advertising channels exceeded our expectations – and why?
- What new market segments can we explore?
- Is the perception of our business positive?
- Are there upcoming events that our company may be able to take advantage of to grow the business?
Threats are external factors that could harm your fashion business. You have no control over them but you may benefit from having a contingency plan. Threats could include new competitors with lower prices, negative press, a recession or increase cost of materials.
Some questions to ask to determine your business’ threats include;
- Who are our existing or potential competitors? What do they do well?
- Do changes in lifestyle, social patterns, etc., pose a threat to our company?
- What situations might threaten our marketing efforts?
- Will suppliers always be able to supply the raw materials we need at the prices we need?
- What new regulations threaten operations?
- What obstacles does our company face?
Once you have answers to all these questions, and more, you can then make informed decisions for your fashion brand. A SWOT analysis is a great resource to guide your strategy meetings. If you are having trouble creating one, our expert team at Mauvelli can help you out in no time.