Expanding on the brief mention of the use of SWOT analysis in my earlier strategic planning post, following is a more comprehensive description of SWOT analysis, why you would use the technique, how you would use it and where in the strategy development sequence.
What is a SWOT analysis
So, starting with the fundamentals, what is a SWOT analysis. SWOT is an acronym standing for Strengths, Weaknesses, Opportunities and Threats. Each of the four terms refers to how those performing the analysis see their organisation relative to their competition;
- Strengths – Considers the strengths of your organisation in the context of the workshop, and how your strengths compare to those of your competition.
- Weaknesses – Considers the weaknesses of your organisation in the context of the workshop and how your weaknesses compare to those of your competition.
- Opportunities – Considers the opportunities your organisation my be able to exploit, these may be opportunities your organisation is able to pursue as part of the activity being analysed alone or in partnership with others.
- Threats – Considers the threats to your organisation by either succeeding in the change being considered or in being unsuccessful. In some instances, being successful in one area may limit opportunities elsewhere through diversion of capital and attention.
Why conduct a SWOT analysis
SWOT analysis is a relatively easy to conceptualise, quick and efficient way to undertake an analysis of both your own and your competitors position relative to an opportunity. A SWOT workshop can be assembled and run in an hour if needed and, if properly conducted gives a set of outputs that can be quickly and easily framed into objectives and, being largely qualitative, requires little in the way of post workshop framing.
How is SWOT analysis used
A typical SWOT analysis workshop will be conducted as part of a strategy development process, either as a regular review of overall business strategy, as part of a tendering process or at a critical inflection point for an organisation. For the workshop to be successful the participants need to have a frame of reference to work from, sufficient understanding of the organisational issue under discussion and an understanding of the competitive environment being considered. Typically the framing of the references is performed by the facilitator at the start of the workshop, after which the workshop considers each of the four questions sequentially.
A workshop should be of between 6 and 12 personnel and all personnel should have equal opportunity to contribute, one way to achieve this is to go around the group one by one with each person asked to contribute one idea to the discussion, then when no more points are added to move on to the next issue. Generally it is good practice to start with a different first person for each of the four points to allow everyone to contribute fully, also a good facilitator should look out for anyone dominating the discussion or withdrawing from it, and try to balance the discussions by drawing more from the withdrawing individuals and mitigating the contributions form the dominant contributor. See my earlier post on communication styles for some of the issues that could also occur here.
The round table session will typically produce a wide ranging list of points, these are then analysed by the participants to group, rank and expand or explore, some additional issues may be surfaced by the further examination and some issues may be considered as inconsequential on further examination and disregarded.
The output from the SWOT analysis workshop will then typically be a list of points against each of the four fields of Strengths, Weaknesses, Opportunities and Threats, these points are then feed into the more formal strategy planning sessions to be used for planning the way the organisational issue is to be addressed. So, how to emphasis and build on the strengths, minimise and address the weaknesses, exploit opportunities and mitigate threats.
Where is SWOT analysis used
SWOT analysis is used in many different situations in an organisation; as part of the strategy planning process for the organisation, to review specific organisational questions, in preparing proposals and tenders for work and in any other situation where a relatively quick review session is appropriate. The technique is quick, flexible and can extract some excellent ideas and input from participants for relatively little organisational input.
Comparative SWOT analysis
One other area where SWOT is useful is in a comparison exercise where your organisation is compared against its competitors or potential partner organisations. In this process a SWOT is performed on each organisation, obviously using whatever information is publicly available or can be inferred by the participants. Conducting a comparative SWOT can be an extremely powerful way to identify a strategic partner as it will show where each organisation has complimentary strengths that would allow the shared venture to be stronger than a single organisation.
SWOT analysis for strategic planning
Properly used, a SWOT analysis is a superb tool to form part of a strategic analysis process, however, a SWOT analysis alone will not give you all of your strategy answers. It will identify areas of strength and weakness that can then be considered for the development of the overall strategy and can save wasted effort in pursuing areas where your organisation is clearly deficient. For further discussions on development of strategy please see the associated strategy development posts.
Ulfire is a management consultancy specialising in strategic planning and development of virtual teams for projects and businesses. Please feel free to contact us to discuss any issues we may be able to assist you with.
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