What is a SWOT analysis?
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a useful tool for assessing a company. From an internal perspective it helps to understand what needs to be done to make the most of its strengths and weaknesses that may need to be overcome. From an external perspective it looks at the opportunities in the marketplace and what threats could make the company non existent if not addressed. This then enables decisions to be made based on the findings.
Figure 1 : SWOT grid
When would you use SWOT analysis and what value does it bring?
It’s a simple tool to use and is suitable at a strategic corporate level but equally can be used at department level too. I would recommend doing one on a regular basis either annually or depending upon the amount of change in the marketplace. It can be done with any number of people. I’ve used it with senior execs contributing or whole teams.
Examples where a SWOT analysis could have helped are Blockbusters, Kodak and Blackberry to name just a few. Blockbuster didn’t recognise the threat of online streaming services, Kodak didn’t recognise the threat of digital technology soon enough, Blackberry didn’t adapt to the strength of new competitors emerging such as Apple and Android.
Focusing on the areas of a companies Strengths and Weaknesses and external Opportunities and Threats to it will ensure that decisions can be made to stay competitive. With so many technology advancements and ever-changing landscapes this tool brings much value.
How do you go about running a SWOT analysis workshop?
Conducting a SWOT analysis involves engaging a diverse group of stakeholders in a workshop setting. This diversity ensures a wide range of perspectives at various organizational levels. To initiate the process, it’s crucial to establish a shared understanding of the company or department’s vision. Senior managers can contribute by dedicating 10–15 minutes to outline the objectives and the envisioned accomplishments.
Workshop participants can then be divided into smaller groups if necessary armed with sticky notes and the SWOT grid. In silence, each attendee takes five minutes to jot down their thoughts for each SWOT category before sharing their insights in their respective small groups. To consolidate these ideas, one volunteer from each group presents their findings to the entire room, resulting in a comprehensive SWOT analysis. Equally this could be actioned virtually using communication tools which makes use of virtual sticky notes.
This method encourages a variety of perspectives, setting the stage for brainstorming sessions on necessary initiatives, distinguishing strategic actions, and identifying quick wins.
What about a practical example?
See the below diagram of a SWOT populated based on a fictional consultancy to illustrate how it can be used. This list can end up being quite big, but this is fine as it is part of a brainstorming exercise. Once all contributions have been added the focus can move to picking out the ones that are seen as the most important.
Figure 2 : SWOT grid populated
What are the types of initiatives that may happen because of SWOT analysis?
These will depend upon the analysis from the SWOT analysis. It may involve new initiatives to invest in innovative technologies, diversify product lines to adapt to changing market conditions. It could involve collaborating and forming alliances with other companies to leverage strengths and mitigate weaknesses. It may involve expanding into new markets to capitalise on new opportunities.
If we look at the weaknesses section of the SWOT example above the types of decisions may lead to diversifying to a broader range of industries and sectors to reduce reliance on a single niche.
Other initiatives to overcome the weaknesses could be around implementing a comprehensive marketing strategy to enhance visibility, working on strengthening brand presence and strengthening partnerships with lead generation channels.
The passive industry participation mentioned could be to engage proactively in industry-specific forums, associations, and networks to increase the consultancy’s visibility or to consider sponsorship opportunities and thought leadership contributions within the industry.
Suboptimal website traffic could lead to decisions to focus on improving search engine optimization (SEO) to increase organic website traffic or to invest in targeted online advertising campaigns to drive higher visitor traffic to the website.
This demonstrates the strategic decisions that can be made from reviewing the SWOT analysis.
In conclusion, the power of SWOT analysis lies in its ability to uncover blind spots and inform strategic decisions. The stories of companies like Blockbuster, Kodak and BlackBerry serve as poignant reminders of the importance of regularly conducting SWOT analyses to anticipate change, adapt, and thrive in a dynamic business environment.
Thoughts? Questions? Please share in the comments.
