So What To The SWOT!

The SWOT analysis tool is a simple way to assess the immediate situation in a business.  You can use the tool to firstly to understand the current position and then to identify areas of focus either for improvement or realisation of opportunities.  As with any tool like this, it is important to understand the quality of insight gained in not an output of the model itself, but of the critical thinking that goes into considering each aspect of the analysis.

So let’s make a start.

Strengths and Weaknesses are the internal considerations of the business.  What is the business good at, what is it not so good at?  Why is this?  How does it compare to competitors?  What competitive advantages do you hold internally, what do you do better than anyone else?  What do competitors do better than you?  When you lose business to a competitor why do you?

Then consider the Opportunities and Threats.  Start by specifying a time period in which you want to consider this otherwise the danger is that the outcomes will be too broad.  It can also help to break the opportunities and threats down into micro issues (things that are immediate and within the immediate influence of the business) and macro issues (things that are longer term, broader, considerations that aren’t always within the sphere of influence of the business).

You can now layout these four considerations, Strengths, Weaknesses, Opportunities and Threats into a grid.  It is often helpful to try and correlate the Strengths with the Opportunities.  If there is a big Opportunity and it can be easily maximised by the Strengths of your business than clearly it is worth focussing on. Equally if there is a threat to the business which is made even more daunting by the Weaknesses inherent in the business, then clearly this needs to be carefully considered.

As the end of a SWOT analysis, I always like to say “So What To The SWOT?”!!!  What I mean by this, is that coming up with a list of Strengths, Weaknesses, Opportunities and Threats, is not very difficult.  It is what you do with them and what you conclude from them that is important and adds value.