How To Guide: Completing a SWOT Analysis

“So, you want someone to show you how to complete a SWOT Analysis, .......... and to give you everything you need to get you started”

SWOT Analysis Quick Links: SWOT Templates | SWOT Examples | SWOT Strengths | Common SWOT Mistakes

 

 

SWOT Overview

The SWOT technique is one of the most commonly used strategic planning techniques in business, however it is also one of the most misunderstood techniques.

It is primarily used to provide structure to or summarize your strategic analysis. This technique can also be used in complex decision making, to help you determine which of several options is better.

The Acronym SWOT represents

Strengths

Weaknesses

Opportunities

Threats

 

A SWOT analysis will help you to summarize your understanding of the major issues identified in your strategic analysis. Your strategic analysis will focus on identifying the strengths, weaknesses, opportunities and threats in your three key strategic environments. Where your three key strategic environments are; (Cick each to discover more)

• Internal Environment
• Industry Environment
• Macro Environment

The SWOT methodology is also often used in decision making, as it brings a structured analysis that can be applied to the various decision options which effectively removes subjectivity and emotion from the decision process.

Now, lets take a quick look at Strengths, Weaknesses, Opportunities and Threats

 

 

Strengths and Weaknesses

The strengths and weaknesses are internal to the organization. Your strengths are areas where you have a strategic competitive advantage. These should be completed using the “better than our competitor” test. Your strengths are where you can verify that your business is better than your competitors.

On the other hand your weaknesses are areas where your competitors have a strategic competitive advantage. These are areas where you can verify that your competitors are better than your business.

Consider this scenario.

It is possible that every business in an industry has identified their customer service as a strength. It might be true that all businesses in an industry are good at customer service. However will your customers notice the difference?

No matter how good your business is at something, if you are not better than your competitors it is not a strength.

More on Strengths and Weaknesses

 

 

Opportunities and Threats

Opportunities and threats are external to your organization. It is possible that all businesses in your industry will identify similar opportunities and threats.

You should refer to your macro environment analysis and industry environment analysis, (Porters Five Forces) to help you to identify your opportunities and threats. Or use our SWOT templates, click to go

More on Opportunities and Threats

 

What if you have an internal Opportunity or threat?

You don’t!

Common mistakes include expressing a weakness in terms of the solution so that is sounds like an opportunity.

For example, a manager once told me that they have an opportunity to introduce psychometric testing into their recruitment processes. This may well be true. When asked why they felt this was an opportunity we identified candidate selection to be a weakness.  

 

 

Sample SWOT Diagram

 

 

 

SWOT Tip- when an opportunity is not an opportunity

The opportunity section of the SWOT Analysis is the most commonly misunderstood, many people use the opportunity section to list solutions to their weaknesses and threats.

For example, they may list “we have an opportunity to improve employee retention” as an opportunity, where they should list “Poor Employee Retention or High Employee Turnover” as a weakness.

The SWOT analysis is purely an analysis tool, it should contain independently verifiable statements of fact. In the macro and industry analysis you may identify opportunities that look like solutions, however you should include the statement of fact.

For Example: Instead of listing “We could promote a new environmentally friendly range” you could put “There is a shift in consumer buying patters towards more expensive but environmentally friendly brands, we could move into this market”. This second statement is an independently verifiable statement of fact.

The reason for this is that during your strategic analysis you have not yet made any decisions. Decision making comes after you have completed your SWOT and developed options for action, then you will make your solution decisions.

 

More SWOT Tips

• Strengths and weaknesses are only found in your analysis of your internal environment.


• Opportunities and threats are only found in your analysis of your industry and Macro environments.


• If you think that you have found an internal opportunity or threat then you need to restate it as either a strength or weakness.

For example: If you have “plant breakdowns as a threat”, you can change this to a weakness “old or unreliable capital equipment”

 

 

How to compete a SWOT analysis

There are 2 commonly used methods of completing a SWOT analysis

1. During a brainstorming activity
2. To summarize a extensive strategic analysis

If you are going to use the SWOT technique during a brainstorming exercise, you should have a series of prepared questions or prompters ready to ensure that you consider the common areas of analysis. (These questions can be found in our SWOT analysis template, to access click here)

If you are keen to use the SWOT technique to summaries a more extensive strategic analysis then you may like to review the following sections of this web site to gain an understanding of this analysis.

1. Strategic Analysis
2. Internal Analysis
3. Porters Five Forces
4. Macro Environment Analysis

 

Now, let’s take a look at each section in detail, click to navigate your way through each of the four sections of a SWOT and find out how to complete your SWOT.

Strengths | Weaknesses | Opportunities | Threats

 

Discover more about completing a SWOT analysis, with these helpful links

1. SWOT Templates
2. Discovering SWOT
   • Strengths
   • Weaknesses
   • Opportunities
   • Threats
3. SWOT Examples
   • Retail Business
   • Timber mill
   • Department in Large business
   • Web
4. SWOT Power point
5. Common SWOT Analysis Mistakes
6. SWOT Tips – Check out these articles!
   • SWOT Now What
   • The challenges for a department in a large organization