14 Proven Tips to Master Your SWOT Analysis

A SWOT analysis is simple enough to fit on a single page, yet that simplicity can lead to vague lists and weak strategic decisions. If your SWOT is to help your organisation act, rather than merely describe itself, you need to identify the factors that matter most and support them with evidence.

SWOT lists an organisation's Strengths, Weaknesses, Opportunities and Threats. It remains one of the most widely used models in strategic analysis, but it is notoriously difficult to do well.

The following techniques will help you build a more rigorous, useful SWOT analysis.

Brainstorm a quick and dirty SWOT

Brainstorming is often the default way to create a SWOT analysis. Although it is not the most robust approach on its own, it can still be useful when you need:

• a very quick result; or
• a starting point for further work using the other techniques described below.

Improve the quality of the discussion by including a broad cross-section of employees as well as external perspectives from consultants, customers, suppliers and distributors. SWOT checklists can also help participants consider factors they might otherwise overlook.

Work in reverse order

Strategy is usually stronger when it starts outside-in rather than inside-out. Begin with external Opportunities and Threats, then consider the internal Strengths and Weaknesses that will help you exploit opportunities or reduce exposure to threats.

This sequence prevents the conversation from becoming too inward-looking. It encourages you to ask: what is changing around us, and how well prepared are we to respond?

Start from your Business Model Canvas

A more structured approach is to start with a Business Model Canvas or enhanced Business Model Canvas for your as-is or to-be organisation.

Work through each element of the canvas and carry out a mini-SWOT. Assess your strengths and weaknesses in relation to that element, then consider which trends could affect it positively as opportunities or negatively as threats.

You do not need a long list for every element. However, working through the canvas systematically will produce a more complete and balanced SWOT analysis.

Start from your Value Chain Analysis

You can use a Porter's Value Chain for your as-is or to-be organisation in much the same way.

If you have already used a Business Model Canvas or enhanced Business Model Canvas, you will probably have considered your core processes. You can then focus on Strengths, Weaknesses, Opportunities and Threats associated with your support processes.

Use a PESTEL Analysis

A PESTEL analysis is a useful way to identify a broad range of external opportunities and threats. For each consideration identified, ask how it could help or hinder your organisation.

You may also identify Strengths and Weaknesses by asking where your organisation is particularly well or poorly placed to respond to the trends revealed by your PESTEL analysis.

For a particularly thorough assessment, consider the possible impact of every PESTEL factor against every element of your enhanced Business Model Canvas or Porter's Value Chain.

Use a Porter's 5 Forces Analysis

You can use a Porter's 5 Forces analysis in much the same way as a PESTEL analysis: to identify external opportunities and threats affecting your organisation and industry.

Use a McKinsey 7S

PESTEL and Porter's 5 Forces focus primarily on factors outside the organisation. A McKinsey 7S analysis examines factors that are more directly under the organisation's control.

Consider the Strengths and Weaknesses associated with each of the seven dimensions. Also consider how well those dimensions align with one another, as misalignment can itself be a significant weakness.

Consider all 4 perspectives of the Balanced Scorecard

Consider your organisation's Strengths and Weaknesses from all four perspectives of the Balanced Scorecard: Financial, Customer, Internal Business Processes, and Learning and Innovation.

This helps avoid a SWOT that focuses only on financial performance or customer-facing issues while overlooking the capabilities and processes needed to sustain success.

Mine your Customer Analysis

If you have already used an enhanced Business Model Canvas, you will have considered your customer segments. But do not stop there: review all of your customer analysis for evidence that belongs in your SWOT.

What do customers say they value, or do not value, about your products, services and delivery? If they do not buy from you, what do they buy instead? Their answers can reveal your relative strengths, weaknesses, emerging opportunities and competitive threats.

Mine your Competitor Analysis

Competitor analysis is a valuable source of insight into your organisation's Strengths, Weaknesses, Opportunities and Threats.

Which competitors are gaining or losing market share, and why? Are their target markets shifting over time? What capabilities are they investing in? What skills are they hiring? Which employees or customers are leaving you or your competitors, and where are they going? What messages do competitors use in their press releases and marketing material to persuade investors and customers that they will succeed?

Strength and weakness are relative concepts. Strong or weak compared with what? Competitors and substitutes provide one useful point of comparison. Customer expectations provide another.

Look at it from multiple perspectives

Look at your SWOT from as many perspectives as possible, not only your own. Consider how management, customers, staff at different levels and in different roles, shareholders or owners, regulators, competitors, suppliers and distributors would see the situation.

In other words, assess it from the perspective of all your stakeholders. Different viewpoints can expose assumptions, reveal blind spots and make the final analysis more credible.

Be specific - avoid platitudes in your SWOT

When listing their strengths, many organisations write statements such as “our people are our greatest asset”. Do not stop there. Ask: what specifically can your people do that customers, distributors or other stakeholders value, and that is different from or better than what competitors can offer?

The more specific and quantifiable you can be, the more useful your SWOT will be. A precise statement creates a clearer basis for action than a generic claim.

See also:

• Are your strategic insights insightful?

Back your SWOT up with detailed analysis

A SWOT analysis is often presented as four short lists. But the lists should be the summary, not the whole analysis. Support every statement with detailed evidence and reasoning. What data support it? What examples illustrate it? What assumptions does it depend on?

The more evidence you can provide, the more compelling your SWOT analysis will be. Keep the supporting detail available for those who need to understand or challenge the conclusions.

Do not be afraid to include contradictory evidence and data. Strategy is complex and often ambiguous. Acknowledging contrary evidence increases credibility, helps stakeholders with different views feel heard, and keeps you alert to the possibility that your analysis may change as circumstances evolve.

Your detailed analysis can include evidence about not only your organisation, but also your customers, partners, competitors and other relevant stakeholders.

Prioritise what you include in your final SWOT

Used well, these techniques can generate a vast amount of information. A good final SWOT analysis, however, is usually brief and focused. It highlights only the most important Strengths, Weaknesses, Opportunities and Threats in a way that engages and focuses strategic decision-makers.

Prioritise Strengths and Weaknesses by impact. Prioritise Opportunities and Threats by both impact and likelihood. Combine genuinely related items where this improves clarity, but separate complex items into their constituent parts when they require different responses.

Once you have prioritised your SWOT, exclude the least impactful or least likely factors from the final summary. Do not discard them completely, though. Continue to monitor them in case circumstances change and they become more significant.

StratNav supports all of these techniques in a collaborative online environment. Why not try it for free and start producing a better SWOT analysis that makes a real difference to your organisation?

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