A SWOT analysis is one of the potent tools that enable corporations to consider internal strengths and weaknesses while observing opportunities and threats from the outside. It is important for any business-from startup companies to multinational organizations-because it will provide an orderly method of strategic planning. The cost of a SWOT analysis could be quite different, depending on the size of the company and its operations and resources needed to conduct such in-depth assessment. Herein, in this article, we are going to explore typical costs associated with conducting a SWOT analysis for small, medium-sized, and large companies and offer some insights on how to do a SWOT analysis.
What is a SWOT Analysis?
SWOT analysis is a framework of strategy formulation for analyzing the most important four factors of an institution or project. The factors include: Strengths: these are internal attributes of an organization that give some edge over others. Weaknesses: these are internal factors that may impede the success or growth of the company. Opportunities: these are external factors in which the business can avail its advantage. Threats: these are external challenges that may affect the business or dampen its potential.
It helps the companies outline their current standing, whereafter decisions are made and realistic goals are set.
Cost of SWOT Analysis for Companies of Various Sizes
The cost of performing SWOT analysis may vary according to the size of the company and the level of information one seeks to derive. We will analyze here typical costing for small businesses, medium-sized companies, and large enterprises.
1. SWOT Analysis Cost for Small Businesses
Smaller organizations, such as startups or locals with less than 50 employees, will often conduct SWOT analyses in-house, to save money. For an in-house SWOT analysis, the major costs are a contribution of time and effort by the participating team. Small businesses could hold a couple of brainstorming meetings with key stakeholders to discuss each part of the analysis.
Standard Cost: £0 – £1,500
In-house: The in-house DIY approach cost will be very minimal, restricted to internal resources, basically. On the other hand, if a small business needs an outside third-party perspective, it might engage a consultant for £500-£1,500. This could include perhaps a few hours of consultancy time and a report summarizing the analysis.
The other alternative for small businesses is to use available online tools and templates that provide step-by-step guidance in conducting a SWOT analysis. Most, if not all, of these online tools and templates are available at relatively cheap costs, but some of them are even free of charge. This way, it’s easy for small-scale businesses to conduct a serious analyses of high sophistication without necessarily investing lots of money.
2. SWOT Analysis Costs for Medium-Sized Companies
This applies to medium-sized companies, which may employ 50 to 250 people, and requires a more formalistic approach to a SWOT analysis. This is because these organizations are usually characterized by wider operations and market scope, and hence they are subjected to the more competitive environment. Medium-sized companies, therefore, may find it beneficial if they hire independent consultants or strategy planners for an unbiased evaluation supported by expert recommendations.
Usual Cost: £1,500 to £5,000
Consultant-led: A consultant will interview relevant stakeholders, conduct industry research, and facilitate brainstorming sessions with a medium-sized business in conducting a SWOT analysis. The resultant report from the consultant will detail recommendations for the action required on each factor identified, for which companies can expect to have to pay in the region of £1,500 to £5,000 for this level of expertise.
Smaller and medium enterprises may also do the analysis with internal resources but seek guidance from an external consultant on how the study is structured and the results interpreted. This allows a company to make use of the internal insight but gets the benefits of outside expertise at less cost than a completely outsourced analysis.
Besides, medium-scale businesses might use specific industry SWOT analysis tools or platforms. In such a platform, some templates and data visualization facilities will be available to make the work easier and faster. The subscriptions for such facilities cost from £ 50 to £ 200 per month.
3. SWOT Analysis Cost for a Large Company
Large companies, sometimes offering a variety of products and hundreds or thousands of employees, often require an extended approach when it comes to a SWOT analysis. Their operations usually span over a wide area across different regions or markets. In fact, large companies usually seek the services of consulting firms specializing in strategic planning to perform an in-depth SWOT analysis.
Average Cost: £5,000 – £20,000+
Consulting Firm: Large firms generally get the SWOT analysis done through a consulting firm. This is an exhaustive exercise involving in-depth research, competitor analysis, market studies, and interviews with senior management. The consulting firms would present a detailed report replete with strategic initiatives and recommendations for follow-up action. Their fees can start from around £5,000 and exceed £20,000, depending upon the firm and the level of analysis required.
Analysis by an in-house team with a lead from a consultant: Large companies might house an internal strategic planning team that would be able to do the analysis themselves, simply bringing in a consultant periodically to ensure they are on track. This would minimise the expense to the company, while still having access to consultants’ expertise.
Because the benefits often offset the costs for large corporations, a well-conducted SWOT analysis is usually worth the effort. Indeed, a comprehensive analysis may be sufficient to yield some useful insights that will help a company overcome competitive pressures and a dynamic market, while seizing opportunities for growth.
Who Uses SWOT Analysis?
SWOT analyses are thus carried out in a wide array of industries, such as technology, health care, retail, financial services, and manufacturing. SWOT analysis is considered helpful for all business enterprises, from a small to medium-sized organization to large ones. However, it is most ideal for:
Start-ups: to get insight into starting strengths and weaknesses and to find avenues for growth
Existing Businesses: to develop strategies, gain a competitive advantage, and find new markets
Non-profit organizations and Public Sector Agencies: to ensure optimal organisational performance and well-utilised resources.
For example, technology companies often rely on SWOT analysis to determine their position in relation to product development and competition. Retail companies can utilise the same in analyzing market trends, while health caregivers relate changes in regulatory environment to threats.
How to Perform a SWOT Analysis
The SWOT analysis needs to assemble key stakeholders and then pursue the following steps:
List Strengths: Group those internal factors that give an edge to your business. Resources, skills, customer loyalty, or even revolutionary products may come into the list.
Identify Weaknesses: Discover where internally the company may not be good enough, such as finances, customers, or poor technology.
Find Opportunities: Factors externally that might come in handy for the company due to new market trends, good economic times, or mergers.
Asses Threats: Think of the external threats that may hamper growth; these may be the emergence of new competition, changes in regulations, or economic decline.
After compiling the information, one needs to put it in a four-box matrix and then prioritise each factor according to how it is likely to affect it. In such a format, the mapping will show one’s company’s situation and will allow one to devise plans to capitalise on strengths, remedy weaknesses, avail opportunities and counter threats.
Conclusion
SWOT analysis is a useful practice for companies of any size. The cost to perform a SWOT analysis depends, of course, on the company size and type of details the company requires; small businesses may be in a good position to conduct an internal analysis whereas medium-sized and large enterprises will do better by getting professional external consultants. Be it a startup, medium-scale, or large business, the SWOT analysis has much to avail in terms of valuable insight into decision-making processes that help one sail through difficult times and maximise the benefits availed by opportunities in today’s competitive scenario.
