I understand where you're coming from. The minute "SWOT analysis" comes up, it's easy to start daydreaming about lunch or hope the conversation will wrap up soon. It's no surprise, given that most of us encounter SWOT in dull business textbooks or on plain LinkedIn posts by well-intentioned managers like Craig.
But let's be real. SWOT might have a reputation for being boring, but there's a good reason business have been using it for almost six decades. It's time to shake off the dullness and see SWOT as something far from yawn-inducing.
Table of Contents:
Understanding SWOT Analysis
How to Perform a SWOT Analysis (with an Example)
A Handy SWOT Analysis Template
When to Embrace (or Avoid) SWOT
What's Next? Decision-Making with Your SWOT
SWOT Analysis: Your Questions Answered
Deciphering SWOT Analysis: A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a strategic tool that helps businesses assess both internal and external influences, enabling them to understand their current position and plan for the future. It's about context—considering the positive and negative aspects a company faces internally and in its industry.
Strengths (S) and weaknesses (W) concern the company.
Opportunities (O) and threats (T) relate to the industry and competitors.
Imagine SWOT analysis as a way to read a room—gaining insights to make well-informed decisions. Ever made a mental checklist of who'll attend a family gathering and predicted your uncle's rants about global events? Well, that's a form of SWOT analysis.
Mastering SWOT Analysis: SWOT analysis is simple on the surface. You have four quadrants for company strengths, weaknesses, opportunities, and threats. Following the Harvard Business Review's advice, start externally to gain context before diving into internal factors. So, you'd fill out O and T before S and W.
Let's illustrate this with an example. Consider "Midsize Pty Ltd" a team collaboration app.
Gather Insights: Collect data to speed up inputting ideas later. Review project plans, reports, analytics, or competitor websites. Assume Midsize, Inc. has:
Survey results on user opinions
In-product analytics revealing UX issues
Competitive analysis chart comparing pricing
Identify Opportunities: These are industry conditions to capitalize on. You don't need to seize all, but seeing options helps prioritize big moves. Example opportunity questions:
How's the addressable market evolving?
Are user preferences changing?
What macro trends affect us?
How do we compare to competitors in terms of offerings and pricing?
How can we use our strengths to explore new markets?
For Midsize Pty Ltd in the dynamic team collaboration market, they can consider:
Collaborating with tech companies for growth avenues
Expanding features within existing tiers to outshine competitors
Recognize Threats: These are ways rivals might encroach. They usually involve new competitors, their progress, and industry trends. Example threat questions:
Who are direct competitors? How are they evolving?
Which indirect competitors could become direct?
How's our data security?
Are there market conditions or disasters to consider?
Are there supply chain problems?
For Midsize Pty Ltd tech evolution could pose challenges:
New entrants could bring innovation.
Adapting to user preferences demands flexibility.
Data security concerns need addressing.
Consider Strengths: After gauging external factors, reflect on your company's strong suits. Example strength questions:
What's our standout asset?
What boosts engagement, adoption, and retention?
How do we plan to improve?
Why do customers choose us? Can we amplify that?
What are our key KPIs?
What skills does our team excel in?
Midsize, Inc.'s strengths:
High activation rates via excellent onboarding
CEO's focus on user satisfaction
A growing product team
Review Weaknesses: Analyze where your company falls short in customer expectations or operational efficiency. Example weakness questions:
What bottlenecks exist?
What do customers complain about?
What leads to churn?
Why do customers pass us over?
Do we have the resources to meet goals?
Midsize, Inc.'s weaknesses:
Marketing reshuffle caused delays
User frustrations with tier limitations
Outdated help documentation
Using (or Not Using) SWOT: SWOT lends insights but isn't always the answer. When to Use SWOT Analysis:
Gain a broad view: Apply to your whole company or a segment, market, or department.
Leverage research: Quantitative or qualitative insights strengthen your analysis.
Decide on positioning or pivot: SWOT's internal and external focus aids big decisions.
Combine strengths and weaknesses: Use them to set your product apart.
Assess your health: Weigh strengths against threats for a company checkup.
When to Skip SWOT:
Solitary work: Get diverse input to unveil hidden positives and negatives.
Deep dive: For precise decisions, supplement SWOT with focused analyses.
Unclear motive: Prompt SWOT with specific goals or concerns.
Decisions Based on Your SWOT: Filling a SWOT template could reveal solutions. Tailor SWOT's application to your team:
Marketing: Unite opportunities and strengths for fresh messaging.
Product: Combine threats and weaknesses to enhance or add features.
Finance/Leadership: Weigh strengths and threats to assess health.
Operations: Leverage weaknesses and opportunities to streamline workflows.
Whatever suits your team, summarize key takeaways. For Midsize Pty Ltd it could mean adjusting pricing tiers or automating workflows.
Here's clarity on common queries: Why use SWOT analysis?
It breaks big issues into manageable chunks.
Utilizes internal and external factors for informed choices.
Incorporates diverse data sources.
Sets realistic goals.
Identifies strengths, opportunities, and more.
Applies across business domains.
What are SWOT's components? Strengths, Weaknesses, Opportunities, Threats:
Strengths: Internal strengths and resources.
Weaknesses: Areas needing improvement.
Opportunities: External trends for growth.
Threats: External challenges.
SWOT Mistakes to Avoid:
Bias: Rely on data, not assumptions.
Sole reliance: Integrate SWOT with other tools.
Unverified findings: Validate data.
Inaction: Plan and act on findings. Don't leave reports untouched.
SWOT fuels actionable insights. And unlike school, automate competitor analysis for ongoing market awareness.
Please contact us if you need support to develop your own SWOT analysis.