SWOT analyses have emerged as a valuable approach because they’re fast, flexible, and give a quick overview of the company’s situation. The method works like this:
- Clearly state your objective.
- Identify strengths — things you do well that may help reach the objective.
- Identify weaknesses — areas that need improvement and may hinder you.
- Identify opportunities — places ripe for growth or advantage moving forward.
- Identify threats — competitors or conditions that could harm your efforts.
- Recognize relationships between the identified elements.
- Prune and prioritize to those topics you can focus on to drive change going forward.
The elements proposed in a SWOT may be wide ranging, yet the analysis must be realistic and rigorous. SWOT is a strategic tool. It is about planning for the future, so focus on things that could actually impact reaching the stated objective.
Threat of new upstart competitor? Yes.
Threat of zombie apocalypse? Not so much.
A SWOT analysis can help reveal issues and determine whether the desired objective is feasible in the operating environment. SWOT results can be simply listed or shown in a series of columns. However, the most common representation is a matrix like, this:
|Positive characteristics, tangible or intangible, that will help your efforts. These are things that are going well! e.g., Proprietary technology; brand equity
||Negative attributes that may detract from your ability to execute. These are things that could be improved. e.g., Lack of experienced UX designers; dependance on a single supplier
|Conditions or elements in the environment that can be exploited to help grow. These outside forces may be a benefit. e.g., Market growth in India; possible strategic alliance with Google
||Outside forces that might cause problems and hinder progress. These may require contingency plans. e.g., Entry of Amazon into related industry; proposed legislation to restrict distribution
A SWOT analysis can be used early in a strategic planning session as a conversation starter to surface issues like market positioning or technology changes. Or, it can be taken deep and used as a more comprehensive study.
As a planning tool, SWOT analysis can utilized at many levels. It can be used to:
- evaluate a product,
- appraise a line of business,
- assess a team, or
- analyze an entire organization.