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SWOT ANALYSIS

Strengths; Weaknesses; Opportunity; Threats

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

Conducting a SWOT analysis is greater than a few colleagues placeing neat phrases into a consultant style 2by2 matrix. To be a valuable exercise which the organisation can act upon, the SWOT analysis needs to be informed by 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

Internal Elements

Strengths

When assessing your company consider what sets it out from the market or what gives you a competitive edge:

  1. Brand
  2. Loyal clients
  3. IP (Intellectual Property)
  4. New equipment
  5. Financial capability – cashflow
  6. Cost position

Weaknesses

  1. Lack of capital
  2. Employee retention
  3. Management capability
  4. Unskilled workforce (new workforce)
  5. High staff turnover; working condition

External

Opportunities

  1. Additional markets
  2. Purchase a competitor
  3. Exclusive distribution
  4. New technology

An opportunity not exploited can become a threat i.e.:

  • Digital Books, Music and Cameras

Threats

  1. Exchange rates
  2. Political environment
  3. Replicability
  4. New entrants
  5. New technology
  6. Legal changes
  7. 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

The number of rows above is for illustration only, your SWOT analysis matrix can have as many rows as is required.

In general there are 4 key responses:

  1. Build
  2. Address
  3. Consider/exploit
  4. Protect

The TOWS Analysis tool can help define the next steps to take. In the meantime the following questions will help to guide you:

  1. How do we utilise the organisations strengths to capitalise on opportunities?
  2. How do we utilise the organisations strengths to mitigate against our threats?
  3. How do our weaknesses impact/limit our opportunities and what can we do internally on this?
  4. How are our weakness impacting on the threats
Z

Tips! for getting the most out of your SWOT Analysis

  1. Firstly the preparation step of gathering informed information is a critical step that should never be skipped
  2. Make specific statements for all sections – For example:
    1. 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?
    2. 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
  3. 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.
  4. 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
  5. 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
  6. 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.

SWOT FAQ’S

What is a TOWS Analysis?
A TOWS analysis is completed post a SWOT analysis to help form strategic options from the SWOT insight (we presume the Acronym is the same as a SWOT just backwards).

Consider TOWS analysis as the “Now what” are we going to do about our situation.

What are the benefits of SWOT Analysis?
  1. Simple concept for all to understand
  2. Can be summarised into a single sheet of paper for ease of communication
  3. An inclusive exercise where all sections of the organisation can input
  4. Helps an organisation to lift it’s head up from the day-to-day and assess its position
  5. Performed well leads to further analysis (TOWS) for robust prioritisation and implementation of actions
What are the limitations of SWOT Analysis?
Firstly, let’s start by saying we feel the SWOT analysis is a very helpful tool. However, only if conducted in the right way supported by data, without data the exercise is of less value. Here are some limiting factors often cited with SWOT analysis:

  1. Excessive lists of S.W.O.T items
  2. Too generic; in theory the SWOT could be placed into any other organisation or situation
  3. Based on bias opinion not data led
  4. Confused application of Weaknesses and Threats, Strengths and Opportunities
  5. No prioritisation (suggestion here to follow up SWOT analysis with TOWS analysis)
SWOT Analysis Overview Infographic

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