How to do SWOT analysis? (With example and template)

Discover the enduring power of SWOT analysis for business strategy with StratNavApp.com's comprehensive guide.

Contents

  1. What is SWOT analysis?
  2. What is SWOT analysis used for?
  3. What does a SWOT analysis look like?
  4. Understanding the Structure and Logic of the SWOT
  5. How to do a SWOT analysis
    1. Define your Scope and Objective
    2. Gather Resources and Data
    3. Identify Opportunities
    4. Identify Threats
    5. Identify Strengths
    6. Identify Weaknesses
    7. Summarise the results in a SWOT Matrix
    8. Analyse and Develop Strategies
    9. Maintain and Update
  6. How to approach a SWOT
    1. What order to approach your SWOT in
    2. How to write good strategic insights
  7. Example of SWOT analysis
  8. Benefits of SWOT analysis
  9. Common misconceptions about SWOT analysis
  10. Where to find the SWOT analysis (Template)
  11. Deleting versus filtering items on a SWOT analysis
  12. What to do once you've completed your SWOT analysis

A blank SWOT templateWhat is SWOT analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

The SWOT analysis is one of the oldest, most enduring, most popular and most widely recognised of all of the frameworks used for business strategy.

It provides a snapshot summary of the situational analysis for an organisation.

What is SWOT analysis used for?

The SWOT analysis can be incredibly useful as:

  • a lite or quick and dirty strategy analysis,
  • a precursor to assist in
    • planning a more comprehensive strategy analysis and
    • selecting the most appropriate more complex tools to use, or
  • a means of collating and summarising the outputs from more sophisticated techniques.

What does a SWOT analysis look like?

A SWOT analysis is conventionally represented as a 2X2 matrix with:

  • Strengths listed in the top left quadrant,
  • Weaknesses in the top right,
  • Opportunities in the bottom left, and
  • Threats in the bottom right quadrant.

Understanding the Structure and Logic of the SWOT

The Logic of the SWOTSWOT analysis divides your strategic insights between:

  • positive (favourable) or negative (unfavourable)
    and
  • internal (within the organisation's control) or external (not within the organisation's control).

This inherent structure ensures that your SWOT analysis is MECE (Mutually Exclusive and Completely Exhaustive). That is, each and every strategic insight has exactly and only one place in the SWOT.

The Strengths and Weaknesses represent the internal dimension of the business unit under consideration. These cover factors which are or should be under management's control. A McKinsey 7-S analysis is a good way of making sure you've covered all your bases. StratNavApp.com will help you do this.

The Opportunities and Threats represent the business unit's external environment. These cover factors which are typically not under management's control. A PESTEL analysis or Porter's 5 Forces analysis, is a good way of going after these. StratNavApp.com will help you do this, as well.

It is sometimes tempting to blur the boundaries between positive and negative factors, particularly in the external dimension. After all, is every Threat not really just an Opportunity not yet grasped? This may make us feel more optimistic and proactive. But it doesn't really add anything to the analytical process. So, you should simply consider whether the factor under consideration, if left unaddressed, would be likely to take the organisation closer to or further from its goals.

How to do a SWOT analysis

The best practice for producing a great SWOT analysis that delivers results is to:

Define your Scope and Objective

Start by clearly defining the scope and objective of your SWOT analysis. This could be for the overall business strategy, a specific area (division, department, team) within the business, a specific project or initiative, or a specific business decision. Having a clear objective helps focus the analysis and ensures it addresses relevant aspects

Gather Resources and Data

Collect all relevant data, both internal and external. This includes financial records, market research, competitive intelligence, and feedback from stakeholders. Involve a diverse group of team members to ensure a broad perspective.

Identify Opportunities

To identify an organisation's opportunities, ask:

What is happening or could happen which could have a positive impact on the organisation and its ability to achieve its goals?

Identify Threats

To identify an organisation's threats, ask:

What is happening or could happen which could have a negative impact on the organisation and its ability to achieve its goals?

Identify Strengths

To identify an organisation's strengths, ask:

What resources or capabilities does the organisation have that competitors would find difficult to get and which could:

  • help it to achieve its goals,
  • help it to realise the opportunities identified above, and/or
  • help it to defend itself against the threats identified above?

Identify Weaknesses

To identify an organisation's weaknesses, ask:

What resources or capabilities does the organisation lack compared to competitors and which could:

  • prevent it from achieving its goals,
  • prevent it from realising the opportunities identified above, and/or
  • prevent it from defending itself against the threats identified above?

Summarise the results in a SWOT Matrix

Create a matrix with four quadrants, each dedicated to one component of SWOT. This visual representation helps in quickly identifying the relationships between different elements and developing strategic plans.

You can use our template (below).

Analyse and Develop Strategies

Analyse the SWOT matrix to develop strategies that leverage strengths and opportunities while addressing weaknesses and threats. This might involve:

  • Using strengths to capitalise on opportunities
  • Addressing weaknesses to mitigate threats
  • Developing contingency plans for identified threats
  • etc.

Maintain and Update

A SWOT analysis should be a living document. Regularly update it to reflect new data, changes in the market, and progress on strategic initiatives. This continuous improvement process helps in staying agile and adaptable. Review your strategies as your SWOT analysis changes.

How to approach a SWOT

What order to approach your SWOT in

SWOT OrderIt is customary to approach the SWOT in reverse order. That is, Threats, then Opportunities, then Weaknesses, then Strengths.

This encourages an outside-in rather than inside-out approach which is generally considered better for strategy.

However, the order in which you tackle the quadrants in your SWOT is less important than that you arrive at the end with a concise and insightful analysis of the situation in which the organisation finds itself.

It is fairly common to end up iterating between the segments in an unpredictable order, especially towards the end of the exercise. This is because the 4 quadrants are interdependent on each other.

Resource-based versus Market-based views

The order in which you tackle your SWOT can be related to the Resourced-based View (RBV) and Market-based View (MBV) of strategy.

The RBV starts with what the company has and looks at what it can do with it. This aligns with starting with Strengths and Weaknesses before considering Opportunities and Threats.

The MBV starts with what the market wants and the considers how the organisation can deliver it. This aligns with starting with Opportunities and Threats before considering Strengths and Weaknesses.

How to write good strategic insights

Each answer to the above questions should be added to the appropriate quadrant of the SWOT as a strategic insight. See these tips to ensure your strategic insights are actually insightful.

Example of SWOT analysis

The following example shows what a SWOT analysis of Apple might look like.

Apple SWOT image

See SWOT Examples for more examples and disclaimer.

Benefits of SWOT analysis

The main benefit of SWOT analysis is its simplicity and flexibility. It can be used to capture a very wide variety of strategy insights.

Using the SWOT analysis in conjunction with the TOWS framework provides a solid basis for setting strategic goals.

You can do a quick and dirty SWOT analysis at the beginning of your process to help you decide where to focus more attention and dig deeper. You can use a SWOT analysis at the end of a process to summarise the strategic insights you've gained across all of your strategic analysis.

Common misconceptions about SWOT analysis

Some commentators have argued that SWOT analysis is outdated and too simplistic.

Whilst it is one of the old strategy models still in use, it has stood the test of time and remains a key framework. Its simplicity provides an elegance and flexibility that make it very useful across a wide range of situations.

The popularity of SWOT analysis means it is very widely used. Often it is used by people who lack the skill and guidance to do it well. So it is true that many SWOTS are poorly done. That does not mean that it cannot and should not be done well. StratNavApp.com will provide you with plenty of guidance to ensure you do. (See, for example, Are your strategic insights insightful?)

Where to find the SWOT analysis (Template)

StratNavApp.com includes a fully collaborative and interactive SWOT Template which is tightly integrated into its overall strategy framework. You can easily add, edit, remove and sort items on your SWOT, as well as share it with collaborators and access it from anywhere on any device.

To find your SWOT analysis:

  1. Log in to StratNavApp.com.
  2. Select the project you want to work with.
  3. Click on "Analysis" on the main menu.
  4. Click on "Insights" on the drop-down menu that opens up.
  5. Select "SWOT" on the model selector on the page that follows.

Deleting versus filtering items on a SWOT analysis

All of your strategic insights including those shown on your PESTEL, 5 Forces or McKinsey 7-S models will also appear on your SWOT analysis.

You can't delete an item from your SWOT without also deleting from those other models.

However, you can filter your SWOT according to the impact score attached to each insight. So, for example, you can hide all insights with low impact scores.

To filter your SWOT:

  1. Set different impact levels for each insight - simply click on the insight card and slide the impact slider.
  2. Filter your SWOT - click on the filter icon towards the top right corner of the SWOT and move the slide which appears to to the right to filter out insights which impact below that.

What to do once you've completed your SWOT analysis

Once you've completed your SWOT analysis you can:

  1. Do a competitor analysis.
  2. Develop some future scenarios - this can be especially useful if your SWOT analysis shows that your organisation faces high levels of uncertainty in its external environment.
  3. Proceed directly to setting your strategic goals - you may find the TOWS framework helpful in using the SWOT analysis to set strategic goals.

See also:


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© StratNavApp.com 2024

Updated: 2024-07-21

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