SWOT Strategy, Checklist and Template

Transcription

1 SWOT Strategy, Checklist and Template How to Get the Most Out of a SWOT A SWOT (strengths, weaknesses, opportunities, threats) analysis identifies the internal and external factors affecting your business. By conducting a SWOT you can: Build on strengths (S) Minimize weakness (W) Seize opportunities (O) Counteract threats (T) SWOTs can be enormously helpful when you have a particular business objective in mind. For example, the analysis can help you decide if you should introduce a particular new product or service into a new or existing market. SWOTs can also be part of overall strategic planning by helping you better understand your business and pinpoint areas that need improving. In addition, they can help you understand your market, including your competitors, and predict changes that you ll need to address to make sure your business is successful. The Four Parts of a SWOT Building on Strengths The areas of your business that are performing well are critical to success and give your business its competitive advantage. Knowing what these strengths are enables you to safeguard and build on them. Minimizing Weaknesses Being aware of your business s weaknesses means you can shore them up or at least minimize them. It s important to be realistic about the weaknesses in your business so you can deal with them head on. Seizing Opportunities Opportunities to make greater profits are created by external influences, such as new consumer trends and changes in the market, as well as internal factors, such as your business s strengths and weaknesses. SWOTs are great at revealing opportunities arising out of the interaction between these external and internal forces. Counteracting Threats Threats are external factors that could cause problems for your business, such as changes to the market, a competitor s new advertising campaign, or new government policy. SWOTS help you identify threats and ways to counteract them, depending on your strengths and weaknesses. Page 1 of 6

2 SWOT Strategy, Checklist and Template (continued) The following tips will help you get the most out of any SWOT. Keep your SWOT short and simple, but remember to include important details. For example, if you think your staff are a strength, include specific details, such as individual staff and their specific skills and experience. Be sure to include why they are a strength and how they can help you meet your business goals. When you finish your SWOT, prioritize the results in order of the most significant factors that affect your business to the least. Get multiple perspectives on your business for your SWOT analysis. Ask for input from your employees, suppliers, customers and partners. Apply your SWOT analysis to a specific issue, such as a goal you would like to achieve or a problem you need to solve, rather than to your entire business. You can then conduct separate SWOT analyses on individual issues and combine them. Look at where your business is now and think about where you would like it to be in the future. Consider your competitors and be realistic about how your business measures up. Think about the factors that are essential to the success of your business and the things you can offer customers that your competitors can t. This is your competitive advantage. Use goals and objectives from your overall business plan in your SWOT analysis. Example of a New Product Development SWOT The following is an example of a SWOT a company conducted to decide if it should introduce a new product to its existing product line. The SWOT does not cover the entire business, just the factors that may influence its ability to introduce a new product. To get the most out of the SWOT, the organization has been as specific as possible. For example, rather than simply list competitors as a threat, the SWOT details how their competitors pose a challenge. Internal Environment Strengths (S) Excellent sales staff with strong knowledge of existing products Good relationship with customers Good internal communications High traffic location Successful marketing strategies Reputation for innovation Weaknesses (W) Currently struggling to meet deadlines too much work? High rental costs Market research data may be out of date Cash-flow problems Holding too much stock Poor record keeping Page 2 of 6

3 SWOT Strategy, Checklist and Template (continued) External Environment Opportunities (O) Similar products on the market are not as reliable or are more expensive Loyal customers Product could be on the market for Christmas Customer demand have asked sales staff for similar product Threats (T) Competitors have a similar product Competitors have launched a new advertising campaign Competitor opening shop nearby Downturn in economy may mean people are spending less SWOT Checklist Involve employees from all the key areas of your business in your SWOT analysis (SWOT: strengths, weaknesses, opportunities, threats). Consider involving key customers, suppliers or other sympathetic outsiders who know your market and can provide an objective view. Ask participants to collect and review information on internal resources and external factors affecting the business. Arrange a brainstorming session to identify your firm s strengths and weaknesses and the opportunities and threats facing the organization. Decide whether you have the skills and objectivity to chair the session yourself, or whether you should use an external facilitator. Create an open and honest atmosphere; avoid judging or disagreeing with suggestions; try to draw out weaknesses and threats. Review internal operations (such as finances, marketing, management and personnel, production) to identify strengths and weaknesses. Review external organizations (e.g., competitors, customers and suppliers) and the business environment and market to identify opportunities and threats. When there are no further suggestions, discuss the ideas that have been raised. Agree on the key strengths, weaknesses, opportunities and threats. Identify any additional information you need to confirm your analysis. If necessary, carry out further market research. Assess the significance of your SWOT analysis. Identify areas where you have a competitive advantage (or disadvantage). Create and execute an action plan to tackle weaknesses, capitalize on strengths and opportunities, and deal with threats. Use the analysis and action plan as a review tool so that important decisions mesh with what your analysis suggests. Page 3 of 6

4 SWOT Analysis Template Internal Positive STRENGTHS What are your strengths? What do you do better than others? What unique capabilities and resources do you possess? What do others perceive as your strengths? You can outline the advantages of a proposition/product by considering some, if not all, of the following: Capabilities Competitive advantages Unique selling points Resources and assets Experience, knowledge, data Financial reserves, likely returns Marketing reach, distribution, awareness Innovative aspects Location and geographical considerations Price, value, quality Accreditations, qualifications, certifications Processes, systems, IT, communications Cultural, attitudinal, behavioral factors Management cover, succession Philosophy and values Negative WEAKNESSES What are your weaknesses? What does your competition do better than you? What can you improve given the current situation? What do others perceive as your weaknesses? Here you examine the possible disadvantages of a proposition by looking at: Gaps in capabilities Lack of competitive strength Reputation, presence and reach Financials Your own vulnerabilities Timescales, deadlines and pressures Cash flow, start-up cash drain Continuity, supply chain robustness Effects on core activities, distraction Reliability of data, plan predictability Morale, commitment, leadership Accreditations Processes and systems Management cover, succession Page 4 of 6

5 SWOT Analysis Template (continued) External Positive OPPORTUNITIES What trends or conditions may positively affect you? What opportunities are available to you? This is where you list the opportunities for a proposition in various areas: Market developments Competitors vulnerabilities Industry or lifestyle trends Technology development and innovation Global influences New markets, both vertical and horizontal Niche target markets Tactics Business and product development Information and research Partnerships, agencies, distribution Volumes, production, economies Seasonal, weather, fashion influences Negative THREATS What trends or conditions may negatively affect you? What are your competitors doing that may affect you? Do you have solid financial support? Here you consider threats to a proposition in terms of: Political impact Legislative effects Environmental effects IT development Competitors Market demand New technologies, services, ideas Vital contracts and partners Sustaining internal capabilities Obstacles faced Insurmountable weaknesses Loss of key staff Sustainable financial backing Economy, both local and international Seasonality Page 5 of 6

6 SWOT Template Internal Positive STRENGTHS Negative WEAKNESSES External Positive OPPORTUNITIES Negative THREATS Page 6 of 6