Put SWOT Analysis to Work for Your Business
Chances are you’ve already heard of SWOT analysis. Maybe you’ve even attempted it before. There’s tons of information out there on it, and it’s a classic component of any business school curriculum. But the trick is doing SWOT analysis in a way that helps move your business forward.
SWOT analysis is one of several key strategic exercises a company must perform in order to ensure they’re on the right path to growth. And we’re here to help guide you through the process.
We’ve talked about the need to create an annual strategic plan before, and performing regular SWOT analyses is equally important to the ongoing strategic planning process for any business, regardless of size. The applications of SWOT analysis extend beyond just strategic planning: it can also be a useful exercise for analyzing a potential target market, new product, or business project—although we’ll be focusing primarily on its use for strategic planning today.
While annual business planning is best done at the start of your fiscal year, a SWOT analysis can be done anytime. In fact, we advise you to perform such an analysis at least twice a year, particularly when changes in your organization—or the marketplace—dictate. Let’s dive in!
SWOT Analysis Defined
A SWOT analysis is a formal exercise that’s typically undertaken by executives across different functional divisions to understand the environment in which they operate and compete. What we like about it is that it offers an easy analytical framework that helps guide companywide decision-making and strategy as the organization’s MITs (most important things) for the year are identified and pursued. Keep in mind, though, that SWOT is not limited to an executive exercise, it’s a useful tool for any organizational team striving to improve their efforts in a certain area.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis therefore examines positive and negative factors that currently exist in your business and can impact your objectives. Strengths and Weaknesses are internal factors; Opportunities and Threats are external.
The Importance of Research-Driven Analyses
We’re big believers in the power of research, and its role in SWOT analysis is no exception. Consumer, competitive, market, and internal research are the basic building blocks for smart SWOT analyses. Your research findings will accomplish two main tasks: (1) help answer some tough questions during the course of the exercise, and (2) offer executives a more objective view of the business as a whole.
There are a variety of research sources that we recommend depending on your company size and industry: from qualitative to quantitative, primary and secondary, and third-party or syndicated data. In our work with fast-growing small-to-midsize companies, we walk them through a thorough research process to help inform both the strategic planning and SWOT analysis processes—and we advise you to do the same.
Who Should Be on Your SWOT Team?
When you’re performing an organization-wide SWOT analysis, the best people to involve in the process are those with a deep view into operations, product, sales, marketing, and finance. Assigning executives to specific action items that emerge from the SWOT will help align departmental communications and operations so that teams can continue on the path to success.
Keep in mind, though, that SWOT analyses can also be performed with great success within specific divisions or teams not at the executive level. While our focus here is on a broader organizational SWOT, we also strongly recommend it as a tool for assessing more focused issues within a specific business area, like a low-performing product (tackle SWOT with the product team) or leakage in your sales funnel (tackle SWOT with the sales and marketing teams).
DOWNLOAD OUR COMPREHENSIVE SWOT ANALYSIS TEMPLATES
Need a template to guide your own company’s SWOT analysis process? Look no further! Download our Comprehensive SWOT Analysis Templates below.
The SWOT Deep Dive: What You Should Be Asking
Each of the four SWOT components requires you and your teams to dig deep, ask tough questions, and give factual answers. We provide several basic questions for each section that address issues at a broader organizational level; make sure to consider what other information to include given your particular business circumstances and the purpose of your analysis.
To start, you’ll want to identify all of the advantages and positive attributes that will support your company in achieving your stated objectives. This may include:
- Areas where your company excels
- Qualities of products or services that give you a competitive edge
- People, teams, or training that put your business at an advantage
- Tangible assets such as proprietary technologies, intellectual capital, copyrights, etc.
Identifying areas of underperformance is just as key to business growth. The goal here is to objectively voice concerns regarding factors that put your company at a disadvantage within your market.
Items to consider include:
- Resource limitations, including workforce or training deficits
- Areas where your competition outperforms you, whether in sales, customer service, etc.
- Products or services with perceived issues (deserved or undeserved) in the marketplace
- Communications, including brand communications, that aren’t hitting their mark
Opportunities are defined as those external conditions that you can take advantage of now or in the future. Research plays an extremely important role in discovering new opportunities. It’s also a great morale boost to have teams brainstorm potential opportunities that can help fuel growth.
Some areas to focus on are:
- Underserved markets for your products or services
- Competitors that are experiencing issues in the marketplace
- A new consumer need or problem that your product or service can solve
- Positive press or upcoming news that will bolster short- or long-term growth
Finally, threats are external conditions that will have a direct impact on how you do business and can stop you from achieving your goals. These are the things that your company can’t control but still needs to plan for.
Threats may include:
- Emerging competitors or competitors that have grown in capabilities, size, etc.
- New technologies that threaten to make your offerings obsolete
- Customer attitudes or preferences that are shifting away from your products or services
- Changes in the regulatory environment
If your company does perform regular SWOT analyses, make sure to include past findings in the current conversation. Look for areas where teams moved the needle: strengths and opportunities that were capitalized on, weaknesses that were improved upon, and threats that were neutralized.
Not only can research-based SWOT analysis effectively inform your ongoing strategic planning, but it’s also an opportunity to get your teams invested in the long-term company vision by showing them the progress that’s being made company-wide.
First Comes SWOT, Then Comes…
But wait, you’re not done yet! The most important part of the SWOT work is the analysis that comes after all the questions have been answered and boxes filled in. Narrow each section down to the 5-7 key items that emerged during the process, and then work to connect them directly to your current business objectives.
Given the flexibility of the SWOT process, these items can be applied to your annual strategic plan, no matter where it is in development. Wherever you are in the strategic planning cycle – whether you’re just developing your plan or you’re reassessing it mid-year – your SWOT results can have a significant impact on the success of your ongoing business planning.
Consider this: Do the SWOT results align with your strategic plan goals? For example, if marketing messaging is a clear strength on your SWOT, perhaps it can be leveraged to fuel your goal of launching in a new market by Q3. Or maybe your plan needs to be adjusted to address the underperformance of sales that was identified during SWOT. Once you’ve mapped your SWOT results to your current annual plan, action items should be developed and prioritized – and assigned to the responsible parties.
The more closely you apply your SWOT analysis results to your ongoing strategic planning, the more success you’ll see down the line as the pieces start to fall in place.
Need a template to guide your own company’s SWOT analysis process? Look no further! Download our Comprehensive SWOT Analysis Templates here to get started today.