Understanding Strengths, Weaknesses, Opportunities and Threats
by James Manktelow, editor of Mind Tools and an experienced strategist.
Why use the tool?
SWOT Analysis is a very effective way of identifying your Strengths and Weaknesses, and of examining the Opportunities and Threats you face. Carrying out an analysis using the SWOT framework helps you to focus your activities into areas where you are strong and where the greatest opportunities lie.
How to use tool:
To carry out a SWOT Analysis write down answers to the following questions. Where appropriate, use similar questions:
Consider this from your own point of view and from the point of view of the people you deal with. Don't be modest. Be realistic. If you are having any difficulty with this, try writing down a list of your characteristics. Some of these will hopefully be strengths!
In looking at your strengths, think about them in relation to your competitors - for example, if all your competitors provide high quality products, then a high quality production process is not a strength in the market, it is a necessity.
Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you do not see? Are your competitors doing any better than you? It is best to be realistic now, and face any unpleasant truths as soon as possible.
Useful opportunities can come from such things as:
A useful approach to looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.
Carrying out this analysis will often be illuminating - both in terms of pointing out what needs to be done, and in putting problems into perspective.
You can also apply SWOT analysis to your competitors. This may produce some interesting insights!
A start-up small consultancy business might carry out the following SWOT analysis:
The consultancy might therefore decide to specialize in rapid response, good value services to local businesses. Marketing would be in selected local publications, to get the greatest possible market presence for a set advertising budget. The consultancy should keep up-to-date with changes in technology where possible.
SWOT analysis is a framework for analyzing your strengths and weaknesses, and the opportunities and threats you face.
This will help you to focus on your strengths, minimise weaknesses, and take the greatest possible advantage of opportunities available.