Wednesday, August 02, 2006

SWOT: Everything you wanted to know about SWOT but you were too afraid to ask.....

A SWOT Analysis is a great way to begin to analyse early stages of development and change in a business. It can also be used as a personal tool for self-development. It can help you decide where you might want to go in the future.

SWOT stands for

S = Strengths
W = Weaknesses
O = Opportunities
T = Threats

Strengths and Weaknesses include the INTERNAL elements of the company.
Opportunities and Threats are the EXTERNAL factors affecting the company.


• Good Framework for identifying the above
• A simple framework for developing suitable strategies and tactics
• Assesses Core Capabilities of Businesses
• Provides evidence for Change
• Allows for people outside normal decision makers to participate


• Can generate long lists
• Relies on descriptions rather than analysis
• Ignores prioritisation
• Can be overlooked or forgotten in further stages of development


Typical Strengths normally relate to public relations and perceptions, market share, or people. Other people strengths include:
• Happy, friendly, communicative staff
• Training and personal development
• Trusting company

‘Organizational’ strengths include:
• Customer loyalty
• Capital investment
• Strong Balance Sheet
• Efficient systems and well-developed social responsibility


This should not be used as an opportunity to be really critical about the situation, but to be a more honest appraisal of how things are going. Below are aspects that could be questioned:
• Poor communications
• Inadequate leadership
• Obstacles preventing growth
• Elements of the business that require strengthening
• Who is complaining?
• What are the weak links in the chain?
• Lack of new products or services
• Declining market for your business
• Poor competitiveness
• High prices
• Is the staff aware of the mission, objectives, and policies
• Absenteeism
• Absence of systems to monitor progress?


This is where you need to analyze the socio-economic, political, environmental, and demographic factors. You might include:
• New markets
• New technology
• New legislation and government
• Preferential change in interest rates
• Increase in GDP, peoples spending power
• Growing popularity in your sector
• Population age
You will want to know how you can deal with these opportunities.


This would be simply analysing the external market in reverse to the way you look at opportunities. All those mentioned above can have an inverse effect on your company or service. Other threats could include:
• Unemployment levels
• Political uncertainty
• Exchange rate fluctuations
You should consider worse case scenarios, i.e. in Peru for example, if terrorism returned to Peru.
An interesting point to consider is that opportunities and threats are very much challenges that can be perceived as either an opportunity or threat by the workforce and as a result, one can see how high moral is through this analysis.


Now you need to assess whether the SWOT ties in with the company objectives. You need to prioritize the list that the SWOT shows. Some things can be removed as not being relevant. Make sure that you take action on the SWOT analysis, otherwise it is a pointless, time consuming exercise.



• Be Analytical and Specific
• Record ALL thoughts and ideas
• Take a wide-ranging review of the external aspects
• Be selective in your final report


• Try to disguise weaknesses
• Merely list errors and mistakes
• Use the SWOT to blame other peoples mistakes
• Ignore the outcomes at the later stages of the planning process


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