With the business and IT landscape becoming increasingly complex and fast-moving, there are still some simple, tried and trusted techniques that can give companies valuable insights into what’s working well and what’s not, and how to improve. One of these techniques that shouldn’t be overlooked is the humble SWOT analysis.
In this article, we’ll look at what exactly a SWOT analysis is, how to perform one, and how the results can help you build a strategy for success.
What is a SWOT analysis?
A SWOT analysis is a structured brainstorming technique that can be applied to a wide range of situations, from an existing or new strategy, a new product or service, a new campaign, or your business as a whole.
The acronym SWOT stands for Strengths, Weaknesses, Opportunities, Threats, and helps you analyse both internal (strengths and weaknesses) and external factors (opportunities and threats), to give you both a holistic view and the beginnings of a roadmap for your next steps.
How to perform a SWOT analysis?
Before you start
While anyone can perform a SWOT analysis in isolation, doing it as a group provides a valuable opportunity to bring a team together and encourage their participation in the development of your business strategy. Depending on the makeup of your team, it can also promote mutual understanding of critical issues that impact your success.
How long the analysis will take depends on the size of the group and the focus (see step 1 below), but it should be possible to carry out the basic analysis in less than an hour.
In terms of materials, you’ll need either a whiteboard or a large piece of paper attached to the wall, and suitable pens or markers. Decide in advance how you want people to record their contributions and how you will represent them on the final analysis table, e.g. writing on post-it notes, or directly on a whiteboard? Ensure you have enough materials so you take full advantage of the time allocated for the exercise.
STEP 1: Define your objectives
It might sound obvious, but before you start your SWOT analysis, it’s important to clearly define what you are analysing.
You should be able to do this in one sentence, e.g. implement a brand re-design, develop a social media campaign, establish a presence in the Belgian market within the next year.
You SWOT is specific to that objective – if the objective changes, you’ll need to perform a new SWOT analysis.
STEP 2: Get brainstorming
To visualise your SWOT, make a 2 x 2 grid, e.g. on a whiteboard or large piece of paper attached to the wall. Then, work through each of the segments.
Think of strengths and weaknesses as internal factors – i.e. related to your organisation, its assets, processes, and people – and opportunities and threats as external factors – i.e. related to the market, your competition, and the economy in general.
Some of the questions you might ask, remembering to keep the focus on your objective, are:
- What do we do well?
- Why are we good at what we do well?
- What unique resources can we draw on?
- What do others see as our strengths?
- What do we do badly?
- Where can we improve?
- Where are we lacking resources or knowledge?
- What do others see as our weaknesses?
- What new trends can we take advantage of?
- What gaps in our competitors’ strategy can we exploit?
- How can we turn our strengths into opportunities?
- What obstacles might prevent us from reaching our objective?
- What is our competition doing better than us?
- What threats do our weaknesses leave us open to?
Depending on how you performed your SWOT – whether people wrote down their answers individually or collectively – you may need to spend some time sifting through the responses, removing duplicates, and setting aside any that do not fully fit within the scope of this particular SWOT.
STEP 3: Prioritise and refine
Once you’ve examined all four aspects, you’ll probably be faced with a long list of potential actions to build on your strengths, boost your weaknesses, exploit opportunities and ward off threats. But instead of trying to tackle every point, narrow your final SWOT analysis to the 3-5 most critical elements in each quadrant. This will help make sure you don’t stretch your resources too thin by trying to address every point that was raised.
With the right prioritisation, you’ll have a clearer understanding of the main factors that will impact your success and will be able to focus time and money on the most important ones.
STEP 4: Develop an action plan
A SWOT analysis is only as valuable as the action plan that it leads to. For each priority issue you have identified, there should be one or more clear actions, assigned to a specific person or team, and with a defined timeframe. This way, the valuable insights drawn from your SWOT analysis are turned into actionable points that will show concrete results.
STEP 5: Communicate the results of your SWOT analysis
Sharing and communicating about your SWOT analysis and the resulting action plans is important for many reasons.
Firstly, a detailed SWOT report is a good way to ensure that there were no mistakes, omissions and confusion regarding the analysis, and that everyone who participated really is on the same wavelength.
Secondly, producing a formal report or communication can also help get buy-in from participants and stakeholders, and shows that you value the time and effort spent. Initiatives like this are a key way to engage your team, and you want them to know that they have a real role to play in shaping your company’s success.
While a basic SWOT analysis is in itself a powerful tool that can lead to concrete improvements, an extra step can be to turn your SWOT into ‘confrontation matrix’, where you weigh each strength and weakness against each opportunity and threat. For example, this helps you understand where you can ‘attack’ or ‘enhance’, ‘defend’ or ‘turn around’.
In conclusion, a SWOT analysis is a simple yet highly valuable exercise that requires no investment or technology, only a short period of time and some motivated participants. And its suitable for companies of all sizes. If you are realistic and rigorous in your approach, and follow through with an action plan, a SWOT helps you build on what you do well, address what you’re lacking, minimise risks, and seize opportunities for success.
For more about marketing and sales strategy, take a look at our marketing and sales strategy guide.