04 Apr How to Conduct SWOT Analysis: PRO Tips
The SWOT framework allows the synthesizing of information and insights obtained by collecting information related to the internal strengths and weaknesses along with the external opportunities and threats for a person or an organisation. The acronym SWOT stands for:
Strengths – Positive attributes which can be utilized in favor of the person/organization.
Weakness – Internal factors detracting from optimal performance.
Opportunities – Favorable factors leading to a competitive advantage.
Threats – Unfavorable factors that negatively influence the growth of the person/organization.
Although it is a very simple and widely accepted tool to collect and portray significant information, it is necessary to conduct this review carefully to get valuable results and make use of them to develop the strategies for personal and professional growth. Some of the tips for a perfect SWOT analysis of any organization are mentioned here.
- Elaborate later: The best way to begin with a SWOT analysis is to capture all the factors that are relevant under each of the headings in the form of bullet points. These points can be later reviewed and elaborated or edited further.
- Capture relevant factors: You do not want to miss out on any relevant factor and therefore it also helps to list the factors separately and later classify them as strength, weakness, opportunity or threat. Once these factors are determined, they can be further developed and confirmed in line with the goals to find out whether they have a positive or a negative impact.
- Identifying strengths: Some of the strengths can be easily identified without a deeper analysis but it is necessary that the core competencies and capabilities are listed by understanding how each of them can be utilized to directly benefit us and to enhance the positive attributes. For identifying the strengths of an organisation we can compare the financial performance of the current year with that of the previous years to study the trend and determine the areas where the organisation has improved and over achieved.
- Looking for weaknesses: Just like the strengths, not all weaknesses of the organisation may be apparent and therefore the negative aspects that are internal to the business should be accurately identified as their weakness. An effective way to do this is to compare the organisational performance with the closest competitor and to identify the areas where the performance needs to be enhanced by this comparison. The weakness of the organisation can also be determined with the help of the annual reports and the comparison with the previous years’ performances.
- Potential in opportunities: Opportunities are the external factors which are the reason for the prosperity of the organisation. Identifying the opportunities should be followed by a time frame representing how long the opportunity is going to last. It is critical that the opportunity is taken advantage of at the right time for opening possibilities for the organisation. The opportunities for a business can be easily identified by scanning their environment and looking for the factors that contribute towards the growth of the business. By studying the interesting trends and changes in technology along with the social and lifestyle pattern of the consumers of an organisation the business can spot the opportunities for it.
- External threats: These external factors are beyond our control and have the ability to place the business in jeopardy. The existing or potential competition is the biggest threat to any business. These are organisation and industry specific and need to be identified for developing a contingency plan for addressing them. By observing the inherent weakness of the business, the possible threats can be identified. The quality standards to be maintained by the organisation along with the rules and regulations related to the specifications of the product or service produced should also be closely monitored to keep a track of any changes in it that may pose as a threat.
- Be specific: It is necessary to clearly define the factors and only rely on the facts and the actual performance of the organisation so that an unbiased and accurate report can be generated. This must be followed by the development of an action plan to address the negative influences and enhance the strength by taking advantage of the opportunities.
The SWOT matrix is also referred to as the internal-external analysis since the factors listed in it relate to the internal strengths and weaknesses and the external opportunities and threats of the business. These tips will help you in easily carrying out a SWOT analysis of any organization to accurately assess their internal and external environment.