Tuesday, 13 September 2011

SWOT Analysis - So what?

SWOT analysis is a useful tool for the development and evaluation of strategy and action plans. The acronym - SWOT - stands for: Strengths; Weaknesses; Opportunities; Threats.
SWOT simple
The analysis is usually applied within a specific context, from the viewpoint of; an organisation or company; a product; a project; an individual. The time to use it is when a goal or objective has been set and you are defining the strategy or plan to achieve it.
Analysis of an organisation, project or individual might be interesting but to derive meaningful strategy a clear focus is needed. This is provided by a goal or objective, such as to expand the company, enter a new market, implement major changes or to gain promotion to the top level. With the context and goal as the focus, the analysis then considers:
  • What will help to achieve the goal
  • What will impede progress
  • What can be taken advantage of
  • What must be overcome.
The definitions of each element of SWOT are simple:
  • Strengths: positive advantages to the organisation, thing or person; internal factors that are within your control
  • Weaknesses: internal factors that will hinder the achievement of the goal and that are within your ability to influence
  • Opportunities: external factors, relevant to the achievement of the goal - providing motivation or an advantage, consider when these opportunities may be present and for how long
  • Threats: external factors, outside of your control which present risk to the achievement of the goal, identify their likelihood and possible impact.
From this, you can see that SWOT provides more than just a one dimensional analysis, it helps identify:
  • Positives and negatives that will impact achievement of the goal
  • Internal and external - within your control or not
  • Time frames - now and the future.
SWOT matrix SWOT analysis provides a model for you to consider these dimensions together, as illustrated by the figure above.
The key thing to get across is that the analysis - listing the factors against each of the SWOT elements - is only part of the process.
SWOT - Objective Improve operational efficiency and effectiveness whilst reducing risk of process failures 2a Once you have done this first step, you will be ready to ask yourself, “Ok, I've made some lists - I sort of knew most of this already.  But what do I do next to get some real value from this - how do I formulate a plan or strategy?”
The next step is to take the ideas and create an action plan or strategy:
  • Review the ideas captured - what strategies come to mind?
  • Maintain or build on strengths
  • Weaknesses to be fixed, changed or stopped
  • Opportunities to be grasped, when and how
  • Contingencies to overcome or mitigate threats
  • Review the actions - create one or more plans with timeframes
  • Review the plan(s) and evaluate alternatives
  • Ask the question, "How well does this help with achievement of the goal?"
  • Select the preferred strategy, assign ownership and start to act.
SWOT - Objective Improve operational efficiency and effectiveness whilst reducing risk of process failures 2b As always, click on the images to see full size.
In the next few posts I'll show how aspects of SWOT analysis and planning can be achieved in practice.
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