What is a SWOT analysis?
The information identified during a SWOT session provides the basis for further in-depth analysis using other business tools, and should lead to a business strategy and action plan that capitalizes on strengths, rectifies weaknesses, takes advantage of opportunities, and minimizes threats.
Why do a SWOT analysis?
Using a SWOT analysis as a planning tool provides an opportunity to bring your whole team together, encourages their participation development of your business strategy, and promotes mutual understanding of critical issues impacting on your success. Developing a SWOT Matrix does not require specialized training and has minimal cost, except for the time of those involved. You can use it:
- As part of an annual strategy review
- To react and respond proactively to a changing environment
- To explore new initiatives
- To focus and redirect efforts and resources
- As part of emergency and crisis planning
- As a broad environmental scan for initial planning
- To plan an individual’s career or develop a performance plan.
Who can use a SWOT analysis?
Because the technique is so simple and versatile, development of a SWOT chart is useful for:
- All industries
- Anyone who needs to make decisions and manage initiatives
- All levels of an organization
- Existing businesses
- New businesses
SWOT analysis template
Strengths could include such things as:
- Your brand and reputation
- Patents and intellectual property
- Prime location
- Key employees
- Advanced technology or leading edge processes
List of example questions:
- What do we do better than anyone else?
- What unique resources can we draw upon that our competitors can’t?
- What do our customers see as our strengths and why do they choose us?
Opportunities might include:
- New markets
- New technology
- Changes in customer demographics and lifestyle choices
- Topical events
- Changes in government policy
List of example questions:
- What changes and trends in our external environment can we benefit from?
- Is the opportunity ongoing or is there a limited window to get involved?
- Is the market expanding or do other factors make it worth pursuing?
Weaknesses might include:
- A lack of expertise, skills or funds
- Aging infrastructure and technology
- An inflexible workforce.
A list of example questions e.g.
- What are your competitors doing better than you?
- What makes potential customers buy from others?
- What factors lose you sales?
Threats might include:
- New regulations
- New competitors
- Political change
- Environmental conditions
- The state of the economy
List of example questions:
- What moves are our competitors making that impact on our business?
- What changes will negatively affect revenue and profits?
- What threats do our suppliers face that will impact on us?
Internal factors – strengths & weaknesses
External factors – opportunities & threats
How to run a SWOT analysis session
Define a clear, one sentence objective for the SWOT Analysis.
Gather input and ideas. Start with internal factors – Strengths, Weaknesses; then External Factors – Opportunities and Threats.
Collate ideas – clarify content, group similar ideas, and delete duplicates.
Rate and prioritize issues according to impact on the organisation.
Create an action plan and assign responsibility for each issue to a group or individual for action.
Share and Communicate
Share and communicate the outcomes of the session, including the action plan to relevant stakeholders.
All SWOT exercises should begin by stating the objective of the session and ensuring all participants are clear on the scope so they can focus their efforts. Define the objective before the actual workshop to save time.
The objective should define whether the SWOT analysis is focused at the strategic, tactical, project, product/service, or personal level and have a clear timeframe. Are participants focussed on the next month, year, or a multi-year period?
Each SWOT analysis is unique to an objective. If the business objective, project or product changes, then the SWOT should be reviewed and updated.
Example SWOT objectives:
- Define Strategic Priorities for the next five years.
- Establish a presence in Asian markets within a year
- Implement a new CRM system across the organization in next financial year.
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