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SWOT Analysis
Discover new opportunities. Manage and eliminate threats.
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both
the Opportunities open to you and the Threats you face. What makes SWOT particularly powerful is that, with a
little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the
weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares.
More than this, by looking at yourself and your competitors using the SWOT framework, you can start to craft a
strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your
market.
How to Use SWOT Analysis
Originated by Albert S Humphrey in the 1960s, SWOT Analysis is as useful now as it was then. You can use it in two
ways - as a simple icebreaker helping people get together to "kick off" strategy formulation, or in a more
sophisticated way as a serious strategy tool.
Tip:
Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate
to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT
Matrix is sometimes called an IE Matrix.
To help you to carry out a SWOT Analysis, write down answers to the following questions.
Strengths:
What advantages does your organization have?
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can't?
What do people in your market see as your strengths?
What factors mean that you "get the sale"?
What is your
organization's Unique Selling Proposition (USP)?
Consider your strengths from both an internal perspective, and from the point of view of your customers and
people in your market. You should also be realistic - it's far too easy to fall prey to "not invented here syndrome."
Also, if you're having any difficulty with this, try writing down a list of your organization's characteristics. Some of
these will hopefully be strengths! When looking at your strengths, think about them in relation to your
competitors. For example, if all of your competitors provide high quality products, then a high quality production
process is not a strength in your organization's market, it's a necessity.
Weaknesses:
What could you improve?
What should you avoid?
What are people in your market likely to see as weaknesses?
What factors lose you sales?
Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you
don't see? Are your competitors doing any better than you? It's best to be realistic now, and face any unpleasant
truths as soon as possible.