It is a framework for analyzing strengths, weaknesses, opportunities, and threats... usually in case of a product, company, or person.
Business SWOT Analysis
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What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares.
More than this, by looking at yourself and your competitors using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your market.
To carry out a SWOT Analysis, answer the following questions:
Strengths:
· What advantages does your company have?
· What do you do better than anyone else?
· What unique or lowest-cost resources do you have access to?
· What do people in your market see as your strengths?
· What factors mean that you "get the sale"?
Consider this from an internal perspective, and from the point of view of your customers and people in your market. Be realistic: It's far too easy to fall prey to "not invented here syndrome". (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.
Weaknesses:
· What could you improve?
· What should you avoid?
· What are people in your market likely to see as weaknesses?
· What factors lose you sales?
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.
Opportunities:
· Where are the good opportunities facing you?
· What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
· Changes in technology and markets on both a broad and narrow scale
· Changes in government policy related to your field
· Changes in social patterns, population profiles, lifestyle changes, etc.
· Local events
A useful approach for 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 create opportunities by eliminating them.
Threats:
· What obstacles do you face?
· What is your competition doing that you should be worried about?
· Are the required specifications for your job, products or services changing?
· Is changing technology threatening your position?
· Do you have bad debt or cash-flow problems?
· Could any of your weaknesses seriously threaten your business?
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.
Strengths and weaknesses are often internal to your organization. Opportunities and threats often relate to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix Analysis Tool.
You can also apply SWOT Analysis to your competitors. As you do this, you'll start to see how and where you should compete against them.
Personal SWOT Analysis
Strengths:
* What advantages (for example, skills, education or connections) do you have that others don't have?
* What do you do better than anyone else?
* What personal resources do you have access to?
* What do other people (and your boss in particular) see as your strengths?
Consider this from your own perspective, and from the point of view of the people around you. And don't be modest, be as objective as you can. 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 the people around you - for example, if you're a great mathematician and the people around you are great at math, then this is not likely to be a strength in your current role, it is likely to be a necessity.
Weaknesses:
* What could you improve?
* What should you avoid?
* What things are the people around you likely to see as weaknesses?
Again, consider this from a personal and external basis: Do other people perceive weaknesses that you do not see? Do co-workers consistently out-perform you in key areas? It is best to be realistic now, and face any unpleasant truths as soon as possible.
Opportunities:
* Where are the good opportunities facing you?
* What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
* Changes in technology, markets and your company on both a broad and narrow scale;
* Changes in government policy related to your field;
* Changes in social patterns, population profiles, lifestyle changes, etc.; or
* Local Events
A useful approach to looking at opportunities is also 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.
Threats:
* What obstacles do you face?
* What are the people around you doing?
* Is your job (or the demand for the things you do) changing?
* Is changing technology threatening your position?
* Could any of your weaknesses seriously threaten you?
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.
