Could a SWOT analysis transform your business in ways you hadn’t considered? What is it, how does it work, and how can you unlock its value?
Investopedia puts it well, defining a SWOT analysis as: ‘a framework used to evaluate a company’s competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential.’
A SWOT analysis is a data-driven, fact-based assessment/tool rolled out by organisations. By embarking on an accurate investigation of how the business is performing, it can provide valuable indicators on where it can perform better.
The Coca-Cola Company famously uses regular SWOT analysis to stay ahead of the competition in the ever-changing and highly-competitive beverage market, whether it’s creating healthier recipes or strengthening its already high-level of brand recognition.
SWOT questions and considerations
Strengths – What does the organisation do well? Does it have a good corporate culture? A unique offering? Superb customer service?
Weaknesses – And what are its limitations? Does the organisation have outdated technology, high staff turnover, or too rigid a staff structure?
Opportunities – This can be broad enough to include anything from having few local competitors to being specialists in an emerging industry early-stage technology. How you can exploit this advantage?
Threats – What could hold you back? Negative social media coverage, key person syndrome and a changing regulatory environment can severely affect the potential of any business large or small.
Some businesses will sub-divide a SWOT to include external and internal factors because what happens outside the business has just as many ramifications as what happens inside. And there will be some aspects of running a business that can seem like opportunities and threats, such as government legislation or evolving technology.
Holistic thinking
To be truly effective, a SWOT analysis should get information from all areas of the business top to bottom, and not just from information provided by the leadership and management teams.
So, what do you actually have to do? The first job is to create a team. As mentioned earlier, it’s pointless having a SWOT team made up of only middle management because their objectivity may be compromised by focusing on specific areas, rather than taking a holistic view. Therefore, a wide range of opinions are needed, with each department represented.
‘A good first step is to encourage everyone to share their initial thoughts, perspectives and ideas,’ sales Salesforce. ‘Do this either in person, as a group, or via anonymous online tools – or as a combination of those. The most important thing is to allow people to share their views in an open and non-judgmental setting.’
Key areas of focus can then be identified, followed by a methodology and of course a deadline for when the information needs to be provided and collated. The preferred method for presenting the results is through a simple 2x2 S, W, O and T grid, which can be easily shared across the business.
A SWOT begins by asking many challenging and exhaustive questions. What tech can we use to improve the sales process? Can we expand our core operations and how can we exploit our top-performing products lines?
Do better in what you do best
A SWOT analysis isn’t just about doing better in areas that need improvement. One of the great things about a SWOT analysis is that even if it confirms the things you are doing (or hoped you are doing) well, there is always room for improvement. It’s also quick because it’s easy to manage – you’re not relying on outside assistance, and it’s free.
‘Think about good opportunities that you can exploit immediately. These don't need to be game-changers: even small advantages can increase your organization's competitiveness,’ says Mind Tools.
Further, it enables you to move deeper down the line. If all your competitors produce high-quality products, what can you do to get that edge? Is there something in the manufacturing or delivery process that you do better than anyone else? If you can pinpoint that advantage and make it work harder for you, then a SWOT is a successful use of your time.
SWOT analysts suggest implementing SWOTs twice a year. In times of great upheaval, more often or as necessary.
The results give owners and their teams a solid strategy for prioritising what needs to be done in the organisation and will uncover what you need to do to grow. A SWOT analysis is particularly useful it times when the business landscape is constantly morphing, such as now, as it will force you to look at your business in new ways and from new directions.
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