A SWOT analysis is an incredibly simple, yet powerful tool to help you develop your business strategy, whether you’re building a startup or guiding an existing company. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
MLA Companies has Strategic Advisors who can lead your team through a SWOT analysis, and help to create and execute a Strategic Plan from what you learn. We serve clients in Dayton, Cincinnati, Virginia and Florida.
Use your SWOT analysis to discover recommendations and strategies, with a focus on leveraging strengths and opportunities to overcome weaknesses and threats. Use SWOT Analysis to assess your organization’s current position before you decide on any new strategy.
Find out what’s working well, and what’s not so good. Ask yourself where you want to go, how you might get there – and what might get in your way. These are big issues, and you’ll need a powerful but simple technique to help you: SWOT Analysis.
First, draw up a SWOT Analysis matrix. There are many free, downloadable templates available online. This is a 2×2 grid, with one square for each of the four aspects of SWOT.
You can approach a SWOT Analysis in two ways: to get people together to “kick off” strategy formulation informally, or as a more sophisticated and formal tool.
In either case, gather a team from a range of functions and levels in your organization. Use Brainstormingtechniques to build a list of ideas about where your organization currently stands. Every time you identify a Strength, Weakness, Opportunity, or Threat, write it down in the relevant part of the grid.
To clarify which section an idea belongs to, it may be useful to think of Strengths and Weaknesses as internal factors – that is, to do with the organization, its assets, processes, and people. Think of Opportunities and Threats as external factors, arising from your market, your competition, and the wider economy.
Let’s look at each area in more detail and consider what questions you could ask as part of your analysis. Under each section are a few questions that you can ask your team when you’re building your SWOT analysis. These questions can help explain each section and spark creative thinking.
Strengths are things that your organization does particularly well, or in a way that distinguishes you from your competitors. Think about the advantages your organization has over other organizations. These might be the motivation of your staff, access to certain materials, or a strong set of manufacturing processes.
Questions you might as about Strengths:
Now it’s time to consider your organization’s weaknesses. Be honest! A SWOT Analysis will only be valuable if you gather all the information you need. So, it’s best to be realistic now, and face any unpleasant truths as soon as possible.
Weaknesses, like strengths, are inherent features of your organization, so focus on your people, resources, systems, and procedures. Think about what you could improve, and the sorts of practices you should avoid.
Questions you might ask about Weaknesses:
Opportunities are openings or chances for something positive to happen, but you’ll need to claim them for yourself!
They usually arise from situations outside your organization, and require an eye to what might happen in the future. They might arise as developments in the market you serve, or in the technology you use. Being able to spot and exploit opportunities can make a huge difference to your organization’s ability to compete and take the lead in your market.
Question you might ask about Opportunities:
Threats include anything that can negatively affect your business from the outside, such as supply chain problems, shifts in market requirements, or a shortage of recruits. It’s vital to anticipate threats and to take action against them before you become a victim of them and your growth stalls.
Think about the obstacles you face in getting your product to market and selling. You may notice that quality standards or specifications for your products are changing, and that you’ll need to change those products if you’re to stay in the lead. Evolving technology is an ever-present threat, as well as an opportunity!
Questions you might ask about Threats:
Strengths (S) and weaknesses (W) refer to internal factors, which are the resources and experience readily available to you.
These are some commonly considered internal factors:
External forces influence and affect every company, organization and individual. Whether these factors are connected directly or indirectly to an opportunity (O) or threat (T), it is important to note and document each one.
External factors are typically things you or your company do not control, such as the following:
Once you’ve examined all four aspects of SWOT, you’ll likely be faced with a long list of potential actions to take. You’ll want to build on your strengths, boost your weaker areas, head off any threats, and exploit every opportunity.
But, before you leap into action, look for potential connections between the quadrants of your matrix. For example, could you use some of your strengths to open up further opportunities? And, would even more opportunities become available by eliminating some of your weaknesses?
Now it’s time to ruthlessly prune and prioritize your ideas, so that you can focus time and money on the most significant ones. Refine each point to make your comparisons clearer. Carry through the options you generate to later stages in your strategy formation process and apply them at the right level.
What to do next
With your SWOT analysis complete, you’re ready to convert it into real strategy.
The first step is to look at your strengths and figure out how you can use those strengths to take advantage of your opportunities. Then, look at how your strengths can combat the threats that are in the market. Use this analysis to produce a list of actions that you can take.
With your action list in hand, look at your company calendar and start placing goals (or milestones) on it. What do you want to accomplish in each calendar quarter (or month) moving forward?
MLA has Strategic Advisors who can lead your team through a SWOT analysis, and help you develop a strategy from what you learn, and implement it.