SWOT | What is it…
A SWOT analysis is used to assess a company’s SWOT (Strengths; Weaknesses; Opportunities; Threats) against set objectives. This analyses a company from an internal (SW) and an external (OT) perspective. The framework captures both competitive advantage and dis-advantage. In terms of a project replace the term company for project and the tool works in the same way.
SWOT Analysis requires Data
Remember we said that it is important to note that a SWOT analysis is made up of Internal and External components. Here is where that relevance first takes hold;
Internal Data – Customer feedback (listening posts); Employee Info; Capabilities; Resources; Brand; KPIs
External Data – Secondary Data; Environment; CPI; Industry Data; Competitive Data; Customer Data (non-internal)
SWOT | The Elements
- Loyal clients
- IP (Intellectual Property)
- New equipment
- Financial capability – cashflow
- Cost position
- Lack of capital
- Employee retention
- Management capability
- Unskilled workforce (new workforce)
- High staff turnover; working condition
- Additional markets
- Purchase a competitor
- Exclusive distribution
- New technology
An opportunity not exploited can become a threat i.e.:
- Digital Books, Music and Cameras
- Exchange rates
- Political environment
- New entrants
- New technology
- Legal changes
- Additional markets
SWOT Analysis Chart| How to use it….
Now we know what a SWOT Analysis consists of let’s take a look at the SWOT matrix
In general there are 4 key responses:
The TOWS Analysis tool can help define the next steps to take. In the meantime the following questions will help to guide you:
- How do we utilise the organisations strengths to capitalise on opportunities?
- How do we utilise the organisations strengths to mitigate against our threats?
- How do our weaknesses impact/limit our opportunities and what can we do internally on this?
- How are our weakness impacting on the threats
Tips! for getting the most out of your SWOT Analysis
- Firstly the preparation step of gathering informed information is a critical step that should never be skipped
- Make specific statements for all sections – For example:
- Don’t just refer to ‘competitors’ which are applicable to all organisations. Be specific on how the competitors are a threat – what is it that they are doing?
- If you list staff as a strength then be specific – what is the strengths that they have i.e. a world class data science capability
- As with nearly all business improvement / strategic management activities a SWOT analysis is not a one person job. Be sure to get input from multiple perspectives.
- In-line with the above watch out for and challenge bias – how can sweeping statements be substantiated; this links back to the points in the article, start with data
- Turn off the blinkers. It can be tempting to overplay your organisations strengths and become blindsided to the competition. An external perspective may help here
- The SWOT analysis can be applied to particular parts of an organisation or issue. This can help with focusing in and achieving a more granular view. They can then be pulled together to create an organisational wide perspective.
What is a TOWS Analysis?
Consider TOWS analysis as the “Now what” are we going to do about our situation.
What are the benefits of SWOT Analysis?
- Simple concept for all to understand
- Can be summarised into a single sheet of paper for ease of communication
- An inclusive exercise where all sections of the organisation can input
- Helps an organisation to lift it’s head up from the day-to-day and assess its position
- Performed well leads to further analysis (TOWS) for robust prioritisation and implementation of actions
What are the limitations of SWOT Analysis?
- Excessive lists of S.W.O.T items
- Too generic; in theory the SWOT could be placed into any other organisation or situation
- Based on bias opinion not data led
- Confused application of Weaknesses and Threats, Strengths and Opportunities
- No prioritisation (suggestion here to follow up SWOT analysis with TOWS analysis)
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