SWOT analysis is a tool used to recognize the Strengths, Weaknesses, Opportunities, and Threats to a team or project. Strengths are positive traits and resources that contribute to success. Weaknesses are internal factors that limit your ability to achieve your goal. Opportunities are the external factors that you can use to thrive. Threats represent factors that are beyond your control that can cause harm and jeopardize the business. The goal of SWOT is to implement strategic thinking. You gain a better understanding of the present state, thus aiding in strategic planning and decision making.
Importance of SWOT
SWOT helps you to understand both internal and external factors that contribute to success. It unearths opportunities that you can exploit based on your strengths and exposes your weaknesses so that any threats can be neutralized.
1. The SWOT Team
Identify the right people and conduct a brainstorming session. Select an able facilitator and also assign a person to capture notes from the session.
2. Define the Objective
SWOT is used in different scenarios, such as checking the viability of a new idea or arriving at a specific business decision. Defining the objective helps in efficient use of SWOT.
Gather relevant data that will aid in decision making. A SWOT has to be based on facts and numbers for it to yield the right results.
1. Record Strengths and Weaknesses
Analyze the internal factors that affect your business. List strengths and weaknesses and ask the team to reach a consensus on how to rank them, prioritizing the strongest strength and most dangerous weakness.
2. Record Opportunities and Threats
An environmental scan will reveal the latest trends and opportunities that can be exploited. This involves understanding economic factors, customer preferences, and performing competitor analysis. The opportunities and threats should be ranked according to importance.
3. Considerations and Planning
Analyze S-W-O-T and develop strategies to drive business. Determine what problems need attention and what needs to be changed. Then formulate plans to address these problems. Review goals to check if they are still on track.
Mistakes to Avoid
1. Ambiguous SWOT Objectives
People tend to list many points under each head which leads to an ineffective analysis.
2. Subjective Strengths and Weaknesses
This deters the development of precise action plans.