What is SWOT analysis?
Heard of SWOT analysis but not sure what it is? In this blog post we answer the question ‘what is swot analysis?’, explain how it can be used and what benefits it has.
What is SWOT analysis?
SWOT analysis provides a structured method of analysing the strengths, weaknesses, opportunities and threats. It can be used in any number of different situations, and we have listed some examples below:
- To determine the viability of a project
- To help plan a project (you can include in a business case or business plan)
- Compare and contrast options
- Develop strong business strategy for a new or changing business
- Assist in decision making
- Continual review of business progress
How do you conduct a SWOT analysis?
Ideally a SWOT analysis will be conducted by a team. The team structure is dependent on what the SWOT analysis is intending to inform. For example if you are using the SWOT analysis to help develop strong business strategy your team is likely to be the executives in your business, whereas if you are using it to help with planning a project the team is more likely to consist of the project manager, stakeholders and project team.
The team will brainstorm each of the four factors and the result (once summarised) will be a fully formed SWOT.
- STRENGTHS AND WEAKNESSES
Strengths and weaknesses are factors that are INTERNAL to the organisation or project. These are factors that are within the control, or can be affected by, the organisation or project team.
Strengths refer to any positive internal factors whilst weaknesses refer to any negative internal factors.
Strengths are positive attributes or advantages that you have over other businesses. Examples might include:
- Benefit your project will deliver
- Physical assets of the business
- Business location
You should also consider less tangible factors such as attitude of your staff or customer satisfaction.
In contrast to strengths, weaknesses will be areas that need improvement or put you at a disadvantage compared to your competitors. These could be:
- Lack of technology
- Limited resources (financial, human, equipment)
- Complexity of processes
- Unsatisfactory relationships with suppliers
- OPPORTUNITIES AND THREATS
Opportunities and threats are factors that are EXTERNAL to the organisation or project. These are factors that are out of the control of the organisation or team. There are always external forces that influence and affect every organisation or project.
Opportunities are positive external factors that could improve your business or project. Examples would be:
- Favourable external market conditions that will result in business growth (economic, raw materials etc)
- New technology that will change your business
- Change in customer base or demographics
- New sources of funding
- Supplier relationships
Threats are negative external factors that may impact your business or project. Whilst you have no control over these it can be useful to have plans in place to mitigate or lower the risk of threats.
Examples might be:
- Unfavourable external market conditions (raw materials, exchange rates)
- Competitor growth
- Reduced funding
- Regulatory changes that must be met
- Increase in costs (utilities, rents, resources)
You should now be armed with all the information you need to go off and do a SWOT analysis. In practical terms it’s good to get everyone together in one location and get out a pen and whiteboard. Someone to facilitate the meeting can be useful if you have a lot of opinionated team members. Ensure that everyone has a chance to input and write EVERYTHING down. You can summarise it later when you write it up for presentation purposes.
It can be a little more challenging if your team are located globally or regionally, and not able to physically get together. In this case try using Skype or even the call facility on Facebook and have a shared screen that everyone can see.
Once you have exhausted the brainstorming, you should prioritise the list and, most importantly, TAKE ACTION. Taking action on the output of your SWOT analysis is how you get value from the process.
You should use the output to take decisions and form goals for your business. Take strengths and match them with opportunities, determine how to take advantage of opportunities and how to improve weak areas. Finally, make sure you consider how to mitigate or lessen the impact of those internal threats that are out of your control.
Remember, SWOT analysis should be about digging deeper into your business or your proposed plans and making sure you have covered all the angles. See it as strategic, fun and valuable.
We hope you’ve enjoyed reading this blog post. We recommend you read Business Process Mapping Explained next.
Have you used SWOT as part of developing a strategy or growing a business? Or maybe you’ve found it overly simplistic? Comment away below or share on your favourite social media platform (at the top).
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Comments kindly provided by Alexandr Junek, MBA
The SWOT post has generated a large amount of interest and really valuable comments in social media platforms. We’re really grateful to everyone who has contributed. We were contacted directly by Alexandr Junek, MBA, who was keen to share his thoughts with us. He provided us with a great PDF with an illustration to support his comments. We wanted to share this with all our readers and subscribers as he raises some interesting points. Clicking the link will take you to the pdf. Hope you enjoy. You can add to his thoughts in the comments below.