SWOT Analysis
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SWOT analysis provides insight at a point in time - like a snapshot. Also like a snapshot, it can provide a different picture depending upon what it is focused on. In your business, you might focus one view on the business as a whole; another view of one operating division; yet another view of one sales territory. To do a SWOT analysis, start by dividing a page into four quadrants with a vertical line and a horizontal line.
The top two SWOT analysis quadrants are Strengths and Weaknesses. The bottom two quadrants are Opportunities and Threats.
Strengths |
Weaknesses |
Opportunities |
Threats |
In the first box of this SWOT analysis, list all the strengths of your business, operating division, sales territory or whatever you are analyzing. This isn't the time for modesty. One of the strengths you take for granted might be something that your customers value and that your competition doesn't have or do. Brainstorm. Write down words that characterize your business. You can edit later.
In the top right box list weaknesses - things you don't have, things you cannot do, things you don't do well. This is the time for brutal honesty - you are not producing a selling document so there is no point in fooling yourself. But also a time for realism... sure, you don't have a billion dollars, and you aren't likely to get it soon, nor could you do well with it if you did get it... so stick within the realm of reason.
The lower left box is for opportunities. What is the market NOT doing, what are your competitors NOT doing - what does the market need that you could perhaps provide? Think in terms of what would benefit your customer - cheaper, easier, more convenient, faster...
Lower right is for threats - what do you see that could make you obsolete; that could wipe you out. What are your competitors doing that will change things for you... building automobiles, so there will not be horses drawing carriages, so your buggy whips will no longer be needed [unless you can keep them for long enough for them to become valuable collectors items to be sold online at an embay auction!].
Notice that the top two [Strengths and Weaknesses] relate to matters that are INTERNAL to your business, while the bottom two [Opportunities and Threats] relate to EXTERNAL matters.
A couple of hints here - things that throw our clients off more than anything else when they do a SWOT Analysis...
- Keep It Simple, Sam - not too much detail in a SWOT analysis - it is a snapshot so stick to the big picture. [You might have some items that will warrant deeper study after the analysis.]
- beware of paralysis by analysis or the ready-aim-ready-aim syndrome
- you aren't perfect predictors who know everything about the future, so just try to capture what you do know
