COMPLETE GUIDE OF SWOT ANALYSIS FOR TODAY BUSINESSES







Table of Contents

    • What is a SWOT Analysis?
    • How to Use a SWOT Analysis
      • Effective SWOT Analysis
      • Strengths, Weaknesses, Opportunities and Threats
      • Conducting the SWOT Analysis
      • Checklist of Possible SWOT Factors ― SWOT Analysis Example
      • Developing a Strategic Plan
    • Summary

What is a SWOT Analysis?

You’re probably familiar with the SWOT (sometimes called the TOWS) analysis matrix or grid.
Let’s be clear, this is not the analysis!
It’s simply a means to capture information so you can do the analysis later.
Yes, that’s right. The SWOT analysis begins by collecting information about the organization or project and ends with decisions based on an interpretation of the information summarized in the matrix.
What’s more, the SWOT analysis is a useful way of drawing together analyses of an organizations external environment ― for example, using PEST and Porter’s Five Forces ― and the internal environment ― Porter’s Value Chain, resource analysis and so on.

How to Use a SWOT Analysis

Since the SWOT analysis is unique to each business we can only give some general pointers. However, there are a number of things that can be done to enhance the quality of your SWOT.
Follow these tips and use them in the following example SWOT analysis.

Effective SWOT Analysis

Here are our tips for a perfect SWOT analysis:
  • use a SWOT analysis to distinguish between where you are now and where you wish to be,
  • be realistic about your strengths and weaknesses,
  • be specific ― only include key points and issues,
  • relate strengths and weaknesses to critical success factors,
  • always aim to state strengths and weaknesses in competitive terms,
  • rank points in order of importance, and
  • finally, keep it brief ― never more than a page.

Strengths, Weaknesses, Opportunities and Threats

Strengths and weaknesses are internal to the business and are controllable. Conversely, opportunities and threats are uncontrollable external forces that act upon the situation.
We often find that this part of the exercise is often done wrong. To be clear:
  • Strengths – are positive attributes internal to the organization or situation that are within your control.
  • Weaknesses – are also internal factors within your control that may impede your ability to meet your objectives.
  • Opportunities – are external factors that the organization or project should (or could) develop.
  • Threats – are external factors beyond your control that could place the project or organization at risk.

Conducting the SWOT Analysis

Ideally, in a group or workshop, brainstorm each category and capture the strengths, weaknesses, opportunities, and threats pertinent to the situation, context, strategy or project. Aim to only include key points and make sure these are backed up with evidence ― but don’t be too rigid.
Also, don’t spend too much time capturing this information and don’t over analyse. As with all brainstorming exercises the aim is to capture ideas pertinent to the current business situation.
Finally, highlight the most important issues and then rank them in order of importance before using our SWOT analysis example as a checklist for your own SWOT.

Checklist of Possible SWOT Factors ― SWOT Analysis Example

Internal Factors
Strengths Weaknesses
  • Leadership and management skills
  • Core competences
  • Resources
  • Reputation
  • Product or service quality
  • Market position
  • Capacity
  • Lack leadership and management skills
  • Key skills gaps
  • Weak finances
  • Low quality and reputation
  • Products or services not differentiated
External Factors
Opportunities Threats
  • Economic growth
  • New products or services
  • Weak competitors
  • Demographic change
  • Change in political and economic environment
  • Market growth
  • Global influences
  • New technology developments
  • Economic downturn
  • New market entrants
  • Increased competition
  • Slow growth
  • Change in political and economic environment
  • Technological threat
  • Global warming/ weather
  • Demographic change

Developing a Strategic Plan

The next stage of the analysis is to take the highest ranking strengths,weaknesses, opportunities and threats and answer the following questions:
  1. How do you use your strengths to take advantage of opportunities?
  2. How do you overcome weaknesses preventing you from taking advantage of opportunities?
  3. How can your strengths reduce the probability of threats?
  4. What can you do about your weaknesses to make the threats less likely?
As you answer these questions you will begin to understand the external forces you contend with and how to tackle them. Use your understanding of the implications to develop a plan of action.

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