SWOT Analysis, a strategic tool

Strengths, Weaknesses, Opportunities, Threats,
as key traits to orientate a strategy


A SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is
crucial
* to get a diagnosis of the position and activities of an organization
  (or a person),
* to build a strategy,
* or just to find one's way in a situation.

Strengths and weaknesses address internal traits while opportunities
and threats are found in the outside world

Trying to find what to do
and where walk to go?
=> Make a SWOT!

Why an analysis and diagnosis?

Why the scanner, doc?
lever  Any strategy (and even some isolated but crucial decisions),
for a business, an organization, a project (and of course for any
person like you or me),

should be based on a contagion diagnosis that
  • Takes into account the favorable or unfavorable aspects.
  • Anticipates what might go right or wrong.
=> A SWOT analysis is an essential tool / framework to investigate
        those key areas
and
it can be used:
  • For strategic decisions with crucial long term effects
  • Also for tactical ones in a new (or repetitive) situation.
The aim here is to start / maintain business or financial
relations with an organization
(to buy from it, invest in
it, lend to it, sell to it, or even to become, or keep being, an
employee)

The four sides of a SWOT

Scotland yard? Or management square?

A SWOT analysis focuses on four aspects which are usually crucial to
prepare for the future and more specifically to build strategies and
action plans:

Strengths

Opportunities

Weaknesses

Threats

  • Strengths (that gives us, or can give us in the future, a superiority
Here we identify (useful) traits that most others don't have
and would find hard to imitate.
We have to organizebuild on them. We might have not been
fully conscious that they were here, therefore having neglected
to really use them, before the analysis.

Also, strengths might wane, we have to  maintain them and
find new ones. We need thus to define what strengths we
need to acquire
to be ready for the future.
  • poor Weaknesses, current or potential
so as to correct (or to compensate for) them.
To rest only on our strengths would be complacency
  • Opportunities luck, current or predictable,
so as to seize (or prepare for) them. To invest limited
means in advance on such prospects could be useful one
day, as an "option", even if there is no full certainty that
they will be real.
  • Threats danger (immediate or predictable),
so as to fight them,
or whenever possible avoid / bypass them.

The internal / external combination

The rationale is that
  • Strengths and weaknesses are internal traits
of the organization or person,
  • Opportunities / threats are environment factors
(the outside world) with which it has to play

Well, it is a tool, a template, a research guide, a four drawers cabinet
There are some precisions below, but it is up to you to fill the drawers
with your findings. Hours of fun !
You can also use - lucky you, this article is spoiling you - an
additional tool, another set of drawers, the "W W W W H H W"
method
(Who, What, When,Where, How, How much and Why).


It has been known for two millenaries to present a situation and
is mandatory for any journalist who reports a scooter accident,

The time horizons

Take care of today, and think about tomorrow.

Two different kinds of SWOT might be made, a strategic SWOT and
several tactical SWOTs, with different time horizons.
  • One about the long term position and goals 
of the organization or person.
Here SWOT Analysis is a strategic and planning
tool
.
  • Shorter ones in operational decisions, actions, negotiations
Here SWOT analysis is a tactical tool.

The strategic phase, in the case of a business

How is the car?
How is the road?
Ready for the trip in the economic country?

To help define its "business model" and to build its general ,
marketing and production
strategy and action plans.
a business can make SWOT analyzes
in all areas involved,
which are usually:
  • Its market market position
(measured relatively to its customers, competitors,
suppliers),
  • Its product and service éventail range
which ones are performing,
which ones failing,
which ones missing,
  • Its sousfinance
(solvency, investment resources, profitability...),
  • Its complexorganization
(is it at the same time safe, performing and flexible?
Not easy, hey!)
  • In some cases its network structural partnerships
(we are in the network era, aren't we?)
  • Its methods, knowledge knowledges and knowhow
(so as to make full use of them, or to improve them, or
to add others, or on the contrary ...to "de-learn" or
change damaging ones).
With a specific attention to bolster its innovation
capabilities
.
  • Its person human resources
(people, recruiting and promoting,
internal communication and organization,
empowerment...)
Also external assistance sources (legal, intelligence,
coaching...)
  • Its other resources, capabilities and tool means,
  • And whatever other domains
that are specific and strategic  to the firm activity and
goals.
The "key factors of win success" are different for
an oil company, a luxury brand, a media channel, a
software producer and a pharmaceutical firm.
In complement, as the objective is to build a competitive advantage
a similar analysis can be made on potential competitors (and on
main suppliers and clients), .


By the way, economists will see here some relations with the
"
factors of production and of economic value".

The operational phase:
priorities and actions

Ready to
action move?

From a SWOT analysis, priorities will be defined and detailed
actions to implement during a specific period
will be devised.
=> See, as an example the marketing plan article.
Also management objectives and monitoring can derive from such
plans.

A side aspect: finance and SWOT:

A SWOT analysis / diagnosis might be helpful also for investors /
lenders
when building a prospective financial analysis in order to
decide a business loan or a stock investment.

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M.a.j. / updated : 26 Sept. 2015
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