SWOT Analysis

SWOT analysis

SWOT is an acronym for Strength, Weakness, Opportunity, and Threat. It is a powerful analytical technique which helps you to:

·         Understand your strengths

·         Understand your weaknesses

·         Look for opportunities available and

·         Look at the threats you face.

Of the above four, opportunities and threats are mainly present in the external environment. The SWOT analysis helps an organization to evaluate its internal resources and capabilities. It also helps the organization to make use of the opportunities available and to effectively counter the threats it faces.

This technique can be used by individuals also. The starting point of a successful SWOT analysis is to understand that there are four general objectives, one for each part of the analysis, the goal you wish to achieve.

Ask a few fundamental questions.

While working, include heads from all functional areas, key external stakeholders including suppliers and customers. Keep the group size manageable. Plan well to get everyone’s input and ideas.

STRENGTHS – A strength is a strength if and only if it is present and meets a critical customer need. The customer can be internal or external or both.

• What do you do really well?
• In what product or service areas do you excel?
• What makes you unique in the marketplace?
• What your characteristics are highly regarded?
• What unique resources can you draw on?
• What do others see as your strength?

Answer from your own point of view, your customers’, your teams', and others.

WEAKNESSES – A weakness is a limitation that prevents the organization from achieving its objective.

• What do you not do well? How do you know?
• What needs to be improved? In what way, by whom?
• Are there weaknesses you don’t see but others do?
• What does the team look for that you don’t provide?
• What are your measures of success telling you?
• Are you really prepared to find out?
• Where do you have fewer resources than others?

Answer from your own point of view, your customers’ and others.

OPPORTUNITIES – These relate to any positive or favourable current or future advantage or trend.

• What opportunities would help you become more successful?
• Where would you find them?
• What external changes, events can you take advantage of?  Technology, demographics, legislation, education?
• How can you turn your strength into opportunities?

THREATS – These relate to any unfavourable situation, trend, or change.

• What financial problems do you have?
• Are there internal/external changes that threaten you?
• What do you know about your competitors?
• Are they successful? Why? How?
• What obstacles impede your progress?
• Which obstacles can be dealt with or overcome?
• What threats do your weaknesses expose you to?

 Record the answers in a table of the following format.

Strengths	Weaknesses
Opportunities	Threats

 Now, take the strategic factors identified as strengths and weaknesses. Take each and then rank them across some criteria relevant to the organization. The ranking matrix might look like the one below:

Strengths	1	2	3	4	5
A B C D E
Weakness	1	2	3	4	5
A B C D E

Now, work out jointly, the strategies to turn:

·         Threat into opportunities

·         Weaknesses into strengths