What is a SWOT Analysis
Engage a strategy or marketing consultant and you’ll hear the word in a few heart beats.
For some it’s the be all and end all of business strategy, the new buzz word, the thing that will solve all your issues. Well it may just be but it’s not a new thing; I think it originated in the 60s – I can hear some of you saying “it’s not that old”.
The S.W.O.T analysis is a tool to guide the extraction of information relating to a business, program, department, project or even a product or service. Whilst it is mostly kept on reserve for senior managers and executives it is a tool which anyone can use. Yes even a child.
S.W.O.T is an acronym for Strengths, Weaknesses, Opportunities and Threats. That’s it- magic distilled. So how can such a simple tool be of any use at all?
Well I have found that it is often the simplest of tools which are the most beneficial and a large part of my work is actually breaking down complex processes to first principles, allowing anyone to understand and implement. I tend to find that most things in management are simple- through the years they just become over-complicated by people.
A little thing which seems to confuse some people is that the Strengths and Weaknesses look internally whilst the Opportunities and Threats take an external view. Easy way, consider your organisation (or whatever you are focusing on) as the room you are in right now- there are your Strengths and Weakness. They are normally things you have done and as a result have a relatively high degree of control over; your team, policies, processes, products, marketing strategy and so on.
Now consider everything outside the room, these will be your opportunities and threats. A good way to start thinking of the Opportunities and Threats is by conducting a PEST analysis. I like how they make these acronyms to sound hardcore. But basically look at the opportunities and threats from the:
- Political environment
- Economic environment
- Socio-cultural environment and
- Technological environment
Below is a guide on how to perform a SWOT analysis.
Let’s SWOT this analysis
Okay so here are the steps to make this work
- Get a clear idea of what you are going to focus on
- Your organisation?
- Your Project?
- Your Self?
- Get the right people to assist
- Sure it can be done solo, but the more people the broader the ideas
- With that in mind- you want a broad cross-section
- Start anywhere on the grid (S, W, O, or T)
- “Sorry Nic you are are wrong, I looked up SWOT analysis and they all said to start with identifying the strengths first”- Well that’s fine if you want to go by the book start with the strengths. I tend to find that once groups start considering their strengths it provides an air of confidence masking the weaknesses, ultimately leading to arbitrary responses in that section
- Draw the quadrant on the wall; somewhere it can be seen by all but you won’t get in trouble for defacing.
- Start listing down- be measurable where you can
- For the Strengths
- What do you have going for you?
- What competitive advantage do you have?
- What assets do you have?
- Literally what are the things that work in your favour?
- For the Weaknesses
- What is holding you back?
- What is a cause of issues?
- What do others do better than you?
- Again what are the factors you know can be improved?
- For the Opportunities
- Is there any government funding?
- Is your market growing?
- Are there any partnership opportunities?
- Are there emerging trends that might benefit what you are doing?
- Can you capitalise on new technology?
- For the threats
- Look at the risks
- What is the economy like?
- Is there a stable government or upcoming election?
- Are your competitors doing cooler things?
- What are the things that could impact you in a bad way?
- For the Strengths
Ok so that was fun. Once you have run this exercise it is just the starting point. The SWOT analysis is not a conclusive tool. It merely provides a basis for the development of strategy. Whilst the development of strategy will be unique to each organisation, there are a couple of things to keep in mind:”
- How can we exploit or strengths;
- turn these into competitive advantages
- secure funding
- ensure commitment
- market ourselves
- motivate others
- How can we guard against our weakness?
- Make plans to improve
- Partner or merge
- Limit work in exposure areas
- Put in measures to limit impacts
- How can we harness opportunities?
- Select the opportunities to chase
- Make plans
- Create opportunity registers
- How can we protect against threats?
- Focus on what you can control
- Plan for the worst
- Diversify if needed
- Develop a risk register