Many business owners have heard of the SWOT analysis. Usually, the SWOT analysis is associated with strategic planning for businesses and organisations. The SWOT analysis is a powerful technique to evaluate your business to develop a strong business strategy. The most significant benefit of the SWOT analysis is that it helps managers and business owners to get out of the detail; it enables us to see the forest from the individual tree or branch. It is also a very popular tool used during a scenario planning process, which helps businesses prepare and deal with an uncertain future.
The SWOT analysis’s beauty works for small and big businesses and does not require a management consultant or MBA to perform it. It works for both For-Profit or Non-Profit organisations and can be applied to the whole company or only one department, and it can even be used for a single project.
What is the SWOT analysis?
It is a technique to determine your business’ Strengths, Weaknesses, Opportunities, or Threats that may be impacting your business, hence the acronym SWOT.
Important to understand is that the Strengths and Weaknesses are looking into the organisation or business. It includes brand, reputation, patents, resources, unique products, and specific skills or knowledge, to name but a few. The organisation or company usually has control over these elements.
Opportunities and Threats, on the other hand, are externally focussed. It will include things like the competitors, suppliers, prices, economy, legislation, politics, the environment, and demographics, to name a few. Most likely, the business or organisation does not have direct control over these.
How to conduct the SWOT analysis?
One or two people can do the SWOT analysis, but it is best to get a team of people to brainstorm and discuss the items identified. It is essential to include as many as possible of your team in this process since companies make sense through exercises like these where topics can be raised and thoroughly discussed. The real value comes when the strategic options are being discussed towards the end of the SWOT process.
When asking the questions it is important to set aside sufficient time to focus and to answer them honestly.
It is vital to keep each item short but understandable. Work on a category at a time until all four categories have been completed.
What question to ask during a SWOT analysis?
The following questions may help you to develop your SWOT.
- What are things your company/organisation does well?
- What internal people resources do you have (expertise, skills, knowledge, education, network, etc.)?
- What tangible assets do you own (intellectual property, capital, proprietary technologies, cash, etc.)?
- What makes your company/organisation unique?
- What qualities separate you from your competitors?
- What obstacles stand in your ways of delivering to your customers/clients?
- What is limiting your business/employees to perform?
- What expertise/skills/technology, etc., do your business lack?
- What does your competition do better than you?
- What improvements are required to be able to deliver on your objectives?
- What causes your business not to deliver on its goals?
- Are there any underserviced markets for specific products?
- How many competitors are in your vicinity?
- Are there any Increasing needs for specific products or services you can offer?
- Does your business have a positive perception of the market?
- Were there any changes in the market or environment that created opportunities?
- What is everyone else overlooking?
- What new trends or needs are you recognising when looking at people around you?
- Who are your existing and emerging competitors?
- Are there any changes in the regulatory environment?
- Are there any negative attitudes or press related to your business or industry?
- Which factors beyond your control places your business at risk?
- Are there any trends or developments that may negatively impact your business?
- Were there any significant changes at your supplier’s?
- Are there any shifts in your customers’ behaviour or buying patterns?
- Are there any new technologies that may impact your internal processes?
How to interpret and use the SWOT analysis?
When the SWOT analysis template has been populated, one can start to identify strategies and actions. When comparing the Strengths and Opportunities, we find that both help achieve business goals and objectives. The team needs to consider which of the company’s Strengths can be utilised to maximise the Opportunities identified.
Next, the team needs to focus on the Weaknesses and Threats that are harmful towards achieving the business goals and objectives. Here the team needs to consider how to limit the company weaknesses to avoid Threats.
Thirdly the team needs to look at Weaknesses and Opportunities. The team needs to consider how to make the best use of the opportunities given the companies weaknesses and possibly reduce or overcome Weaknesses by using Opportunities.
Lastly, the team needs to consider using the company’s Strengths to eliminate or lessen any Threats identified.
How to implement these strategies or actions identified?
It is of no use to go through all the effort to develop the SWOT and strategies and not implement them. In my experience, I found that many strategic initiatives fall flat because of an attention shift from top leadership. It is therefore critical that these initiatives are managed with the necessary rigour and the necessary attention.
The best way is to establish a drumbeat of meetings to monitor progress and challenges as well as for leadership to provide support to the project teams.
I will provide more detail about my experiences in implementing strategic and transformation initiatives in future articles.
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