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SWOT Analysis Overview What is SWOT Analysis? A SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool used to pro vide a general or detailed snapshot of a company's health. Think of your SWOT as a tune-up that every business needs periodically to diagnose and fix what’s a bit worn, what’s on the verge of breaking down, or what’s already broken and needs repl acement--so that you can keep the business humming—even better than it has in the past. SWOT offers professional managers an effective evaluative technique to aid the decision making process. It can not find the solution for you, but it will ensure that issues are: identified, classified and prioritized clearly, showing the problem in terms of key underlying issues. Decision makers can then see the answer. It's a four-part approach to analyzing a company's overall strategy or t he strategy of its business units. All four aspects must be considered to implem ent a long-range plan of action. Remember, It’s Virtually Impossible To Focus Too Much On What You Do Well And What Creates Profits For Your Business. © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserv ed. Page 2
. so can offer good value to customers Weaknesses: Our company has no market presence or reputation We have a small staff with a shallow skills base in many areas We are vulnerable to vital staff being sick. etc. as the current small amount of work means we have plenty of time to devote to customers Our lead consultant has strong reputation within the market We can ch ange direction quickly if we find that our marketing is not working We have smal l overheads. etc. A start-up small consultanc y business might carry out the © Copyright 2006 . The consultancy should keep u p-to-date with changes in technology where possible. good value services to local busines ses. following SWOT analysis Page 3 . to get the greatest poss ible market presence for a set advertising budget. All rights reserv ed. no need f or higher management approval.SWOT Example Strengths: We are able to respond very quickly as we have no red tape. with many future opportunities for success Our local council want s to encourage local businesses with work where possible Our competitors may be slow to adopt new technologies Threats: Will developments in technology change t his market beyond our ability to adapt? A small change in focus of a large compe titor might wipe out any market position we achieve The consultancy might theref ore decide to specialize in rapid response.Advanced Integrated Technologies Group. We are able to give really good customer car e. Marketing would be in selected local publications. Inc. leaving. Our cas h flow will be unreliable in the early stages Opportunities: Our business sector is expanding.
businesses are surviving the pain. So why take the time to bang your company over the head doing a SW OT analysis when so much is out of your control? No question that the current do wnturn is impacting some businesses more traumatically than others. Why Bother to SWOT? The ec onomy stinks. and of examining the Opportunities and Threats you face.Advanced Integrated Technologies Group. Carrying out an analysis using the SWOT framework will help you to focus your activities into areas where you are strong. and a lot of disappointing business results can be blamed primarily on the general economic climate. Simultaneously. allowing it to allocate resour ces in such a way as to maintain any dominant positions it may have. During depressed economic times. Winners typically win not by sticking with th eir past game plans--but rather by focusing on some new thing(s) that are under their control.Why Use SWOT? In any business. SWOT Analys is is a very effective way of identifying your Strengths and Weaknesses. All rights reserv ed. an effective SWOT analysis will help determine in which areas a company is succeeding.. it is imperative that the business be its own worst critic. and where the greatest opportunities lie. A S WOT analysis forces an objective analysis of a company's position via its compet itors and the marketplace. A high percentage of U. there are still lots of winners © Copyright 2006 . and many are even thriving. Inc. Page 4 . But look around.S.
Frequently t he related decisions and actions are characterised by trying to understand the c omplexity of the issues involved so that an appropriate decision can be made. SWOT analysis is internationally known as a method of understanding the issues which are invol ved.. In doing so. SWOT analysis is a dynamic process of decision making with many applicati ons in organizations and other applied fields © Copyright 2006 . Analyzing issues that have led to failure in the past Providing linearity to the decision making process allowing complex ideas to be presented systemati cally. Inc. Page 5 . The business of managem ent today is characterised by complex issues and continuous change. All rights reserv ed. se SWOT analysis to help you and your t eam reach the best solution by: Helping decision makers share and compare ideas Bringing about a clearer common purpose and understanding of factors for success Organizing the important factors linked to success and failure in the business world. or by yourself if you are a one-person shop. Wh ile this kind of applied decision making is not an exact science.SWOT Analysis The Basics You can develop the basic analysis in a brainstorming session with members of yo ur company. ideas can be shared between managers and even integrated into a wider picture for subsequent analysis.Advanced Integrated Technologies Group.
Advanced Integrated Technologies Group.or customers and competitors.SWOT Analysis How Does SWOT Analysis Work? The strategy is to look at the organizations current performance (strengths and weaknesses) and factors in the external environment (opportunities and threats) that might affect the organizations future. Once the attributes for each section have been identified it is possible to determine the point of balance. Weaknesses Page 6 EXTERNAL Opportunities Threats . an information technology departm ent needs to determine the strengths and weaknesses of its people and its techno logy. It also needs to make sure the IT strategy complements the company's busin ess goals. The department head needs to ask: What is each staff member good at? What are they not good at? Project leaders also must consider opportunities and threats -.. For example. Inc. How attractive is the market or directi on they're considering? What's their market share and cost structure? POSITIVE NEGATIVE INTERNAL Strengths © Copyright 2006 . Eventual ly the points of balance of strengths versus weaknesses and opportunities versus threats can be plotted together. All rights reserv ed.
according to Glazer.. Page 7 . Identifying opportunities was an easier task. Dell realized that competitors like IBM and Compaq Computer Corp. Fuzzy strategies fail..SWOT Example Delta Air Lines Inc. On the threats side. Dell put together a business str ategy that included mass customization and just-in-time manufacturing (letting c ustomers design their own computers and custom-building systems). chose to invest in a multibillion-dollar customer service system that addresses the flight delay problems experienced by 20% of its passen gers. Inc. Dell also stuc k with its direct sales plan and offered sales on the Internet. As for weaknesses. All rights reserv ed. the company acknowledged that it lacked sol id dealer relationships. which is a great example of how an IT company can use a SWOT analysis to carve out a str ong business strategy. Clarity in strategy works. Delta believed customer service was an important area for increasing market share and that competitors could pose a threat if De lta didn't address the problem.Advanced Integrated Technologies Group. had stronger brand names. wh ich put Dell in a weaker position with dealers. Dell recognized that its strength wa s selling directly to consumers and keeping its costs lower than those of other hardware vendors. Most strategies fail because t hey don't have a clear direction © Copyright 2006 . Dell look ed at the marketplace and saw that customers increasingly valued convenience and one-stop shopping and that they knew what they wanted to purchase. Another example is Dell Computer Corp. Dell also sa w the Internet as a powerful marketing tool.. Although some companies might think the move was excessive considering 80% of customers have no problems.
SWOT Analysis Internal and External Analysis To get a better look at the big picture. External Analysis: Look at the main points in the environmental analysis. What better source than the group of participants composed of stakeholders. All rights reserv ed. staff. Thin gs that can be handled now.Advanced Integrated Technologies Group. Things that should be researched further. Internal Analysis: volunteers.. A SWOT session is a participatory group proc ess which produces output valuable for annual planning © Copyright 2006 . and identify t hose points that pose opportunities for your organization. Page 8 . mark each point with: Things that MUST be addressed immediately. This can be done by analyzing your organization's strengths and weaknesses. Things tha t should be planned for the future. consider both internal and external for ces when uncovering opportunities and threats. and those that pose t hreats or obstacles to performance. and/or community residents? Examine the capabilities of your organization. Key points: Once the SWOT analysis has been completed. Inc.
works best in smaller groups than a SWOT session.. The "Brainstorm" is best used when setting up a new project or orga nization. a further brainstorming session might be done to ana lyze it further & decide what action to take.Advanced Integrated Technologies Group.) Now that each point has been prioritized. It can be used in a conference where the partic ipants come from different locations and organizations.SWOT Analysis The Basics (Cont. add a deadline. The observations generated by the participants should not include a ny major surprises to the organizers and coordinators of the program and the adm inistrators of the organization. Inc. set an action point for each and assig n it to a person. Although the SWOT analysis will assist in iden tifying issues. With complicated issues. All rights reserv ed. Page 9 . the action plan will ensure that something is done about each on e. A SWOT session is also u seful for deciding upon a major transformation of a program © Copyright 2006 . and can be effective ly used in the transformation process when the participants are a smaller group of managers. The SWOT analysis results should b e reviewed every few months to determine if anything has changed and what has be en achieved.
Yo u can also expand the reach of a SWOT analysis through surveys. That is where things like common sense. you are sure to come away with newfou nd insights. Hispanic popul ation experienced this phenomenon in the late 1990’s and early 2000’s. competitor. Page 10 . search engine inclusion. and/or company image. This will better help you spot opportunities for and threats t o your company. and outside li nks to the sites. If you do not have a dequate information. All rights reserv ed. an experienced manager knows that complete information is never avail able. In the real world. but their spe cific needs are not being fully met by your competitors. examples of this abound. As each wen t out of business. Areas to consider researching include customer awareness. the trend toward healthy eating coupled with an insistence on good-tasting food produced a shortage of acceptable natural food alternative s. the results of your analysis are likely to be less reliable . Oft en. interest. brand . trial. However.S. Note Internet-related activities s uch as trade organization participation. * A customer segment is becoming more predominant. and product and/or site performance. for example. Whether using a basic o r more advanced approach to SWOT analysis.SWOT Analysis Additional Notes Do realize that any analysis requires data and information. * A customer. importance of different site or product attributes to your customers.. The U. You can learn mo re about your own as well as competitor’s sites and businesses. Use these to increase your company's effectiveness and as input int o your business or marketing plan The SWOT framework offers a good starting point for analysis © Copyright 2006 . Expanded SWOT Analysis You can take an additional step beyond a traditional "text book" SWOT analysis by delving deeper into industry dynamics. opportunities arise as a result of a changing business environment. Inc.Advanced Integrated Technologies Group. Some exa mples are: * A new trend develops for which demand outstrips the supply of quali ty options. gut feel and experience kick in. or supplier goes out of business or merges with another company. and usage levels. A more in-de pth SWOT analysis can help you better understand your company's competitive situ ation. You can also take a closer look at the business environment. Early on. you end up making business decisions with incomplete in formation. site. opportunities arise to gain the defunct business’ customers. One way to step beyond a traditional SWOT analysis is to include more det ailed competitor information in the analysis. Wi th the demise of many pure-play "dot coms".
g.SWOT Analysis Operational Definitions A STRENGTH is something that you truly do well. or a key metric that is going south. can build on. All rights reserv ed. but if you are taking that fo r granted—that’s also a weakness. A Weakness is a real gap. In fact.g. The best way to identify STRENGT HS. something you’re not doing very well and tha t you should be doing better. Every company has strengths. growing customer base or less measurable: a well-run customer service department that keeps customers satisfied (thus help ing both retention and new sales). a complete unwillingness to invest in any marketing ini tiatives or a lack of understanding what to do. WEAKNESSES. A strength can be something very concrete like a large.Advanced Integrated Technologies Group. something important that you really don’t know or aren’t sure about. etc. something that truly differentiates your business. Page 11 . a deficiency. a problem. Inc. Most companies do surprisingly bad job of identifying wha t they are really good at doing.. something that’s dated that no longer applies—even tho ugh it used to. Note that a STRENGTH can also be a weakness: e. a key metric t hat is improving. you’re Number One in your market is a STRENGTH. A weakness can be very tangible and concrete or it can be an attitude: e. excel at versus the competition. OPPORTUNITIES & THREATS is to ask the right questions © Copyright 2006 . one good outcome of a SWOT is to discover what you really don’t know and then do something about it.
This list becomes the most important part of your SWOT for prio ritizing and determining what next steps to take. They are part of the context o f your business. The purpose of strategy is to be really clear before you take the direction.. Threats a re part of the playing field that you can’t ignore. and OPPORTUNITIES & THREATS are in the future— starting with tomorrow. STRENGTHS & WEAKNESSES are current in timeframe. A THREAT is something external to your business that can potentially impact you negatively: competitors (actua lly doing specific things vs. hanging onto the statu s quo when change is required or the impact on remaining if you decide to cut co sts (maybe an OPPORTUNITY). Page 12 . Generally. just being there).g. WEAKNESSES & THREATS--new things tha t that you can do to potentially improve your business—that turn into recommendati ons and actions. government regulations. the overall economy.SWOT Analysis Operational Definitions (Cont. OPPORTUNITIES & THREATS lists—for further analysis and discussion—and possible incorporation into your SWOT . are internal: e. changing conditions in your par ticular marketplace. All rights reserv ed.Advanced Integrated Technologies Group. though. WEAKNESSES. etc. Inc. The point of a SWOT analysis is to have the best shot at a grounded plan © Copyright 2006 . You should also make an ongoing list of Issues and questions that inevitably pop -up as a result of developing the STRENGTHS. something (that you haven’t acte d on or taken advantage yet) that could impact you positively. Some threats. Opportunities are new ways that your exploit your STRENGTHS.) An OPPORTUNITY is a favorable external condition.
such as the company’s core competency and resource analysis Consider stren gths from your own point of view and from the point of view of the people you de al with. Inc. try writing down a list of your characteristics. In some cases this is obvious.be realistic. it is a matter of perspective. If you are having any difficulty with t his. minimize weaknesses. Page 13 . SWOT will he lp you to focus on your strengths. for example .Advanced Integrated Technologies Group. All rights reserv ed. Wh ether these strengths are adequate is an issue for analysis.. and take the greatest po ssible advantage of opportunities available © Copyright 2006 . In other cases. for ins tance. dominant market shares. Define areas you ex cel in.SWOT Analysis Strengths Every organization has some strength. It is imp ortant to note that companies that are in a bad position also have strengths. Don't be modest . Some of their skills may be valuable for continuing in the same way. bu t may be a hindrance to making an organizational or program change. Some of these will hopeful ly be strengths! Strengths will include the wisdom and experiences learned by th e staff. a company is very small and hence has the ability to move fast.
Page 14 .. Inc. All rights reserv ed.Advanced Integrated Technologies Group. Some questions to help you get started © Copyright 2006 .SWOT Analysis Strengths Questions What makes you stand out from your competitors? What advantages do you have over other businesses? What are the major sources of a company's revenue and profit? What is the market share of the company in its various product lines? Does the company have strong brands? Is the marketing/advertising effective? What is the major focus are of the company? Does the company have a pool of skilled employee s? Is the morale of the employees high? Are there rewards in place to create an atmosphere conducive to excellence? What is the cost of capital? What is the sto ck price track record? Does the company harness information technology effective ly? Does the company manage its inventories efficiently? Has the company demonst rated the ability to adapt and change? Is the company able to innovate? How has the company withstood international competition? Think about what your company does well.
All rights reserv ed. this is obvious. It is important to note that companies that are extremely competent in what they do. Inc. a company has 99% market share and is open to attack from every new player. In some cases.Advanced Integrated Technologies Group. How badly these weaknesses wil l affect the company is a matter of analysis. Think of a SWOT as a Cliffs Notes version of deconstructing your business. Page 15 . takin g a fresh look. a stricter regulatory environment. and face any unpleasant truths as soon as possible. In other cases. it is a matter of perspective. say f or example.SWOT Analysis Weaknesses Every organization also has some weakness.. and jumpstarting your company to steer it a new direction to gro w your business © Copyright 2006 . also have weaknesses. for example. Consider this from an internal and external basis: Do other people seem to perceive weaknesses that you do not see ? Are your competitors doing any better than you? It is best to be realistic now .
Inc. Page 16 . Here are some questions to help you get started © Copyright 2006 ..Advanced Integrated Technologies Group.SWOT Analysis Weakness Questions What do your customers complain about? What are the unmet needs of your sales fo rce? What are the least profitable product lines for the company? In what areas is the company not able to recover costs? Which are the weak brands? Is the mark eting/advertising effective? Is the company not focused? Is the company able to attract talent? What are the biggest expenditures of the company? Is the company able to raise money when it needs to? Does the stock price history inspire conf idence? Will the company be able to stand price pressure from competitors? Has t he company been able to bring new ideas and products to the market place? Do emp loyees feel facilitated to perform their best? Do employees have faith in manage ment? Are the corporate governance standards high enough? Is the company losing out to competitors on the technology front? List the areas that are a struggle for your company. All rights reserv ed.
These could r ange from diversification to sale of operations. the SWOT can be used in other contexts than transformation of a program.. Opportunities . then it is more likel y to succeed. a SWOT looks only at the external environment for opportunities. then go a step further and think how to match these to your internal strengths. Apart from the kinds of responses d esired. and is recommended to be used in annual or biannual review meetings. All rights reserv ed. which are related to a problem © Copyright 2006 .Advanced Integrated Technologies Group. The aim is to provide a non-threatening situation for participants to contribute as freely and without inhibitions as feasible. Inc.Traditionally. Page 17 .SWOT Analysis Opportunities All organizations have some opportunities that they can gain from. all the strengths. Identifying hidden opportunitie s is the mark of an astute analyst. and the links between iss ues. opportuniti es and threats that they can recall. If SWOT is based upon verifiable observatio ns of the conditions and attributes that will contribute to success. I suggest you look externall y for areas your competitors are not fully covering. weaknesses. Try to uncover areas where your strengths are not being fully utilized. SWOT analysis highlights the key issues. and is real istic in identifying what may stand in the way of success.
SWOT Analysis Opportunity Questions Analyze your customers and market attractiveness Are there emerging trends that fit with your company's strengths? What are the interesting trends? Is your comp any positioned to take on those trends? Is there a product/service area that oth ers have not yet covered? What favorable circumstances are you facing? Is your c ompany entering new markets? Is your company advanced in technology? Similarly.Advanced Integrated Technologies Group. Page 18 . All rights reserv ed. Inc. opportunities for some actions may be threats for others © Copyright 2006 ..
In a variation of the method. such as lower priced international compe tition Threats . Carrying out this analysis will often be illuminating . however. provide them wi th blank newsprint and markers. the advantage is that the total number of contributions is reduced becaus e there is less duplication.Advanced Integrated Technologies Group. By looking both inside and outside of your comp any for things that could damage your business. These could be internal. you may be better able to see the big picture. and ask them to come up with small group contrib utions. threats in a traditional SWOT analysis a re considered an external force.As with opportunities. Page 19 . One drawback to this is that some individuals might be reticent at contributing in front of fri ends. Or they could be external. their supervisors or persons they supe rvise. It is by understanding the key issues that a solution to a problem can be achieved © Copyright 2006 . such as falling p roductivity. and in putting problems into perspective. the small groups are best chosen randomly. people with whom they work closely. Inc. and some persons contribute more in a small group d iscussion than they would alone in front of a piece of paper. In this case. the facilitator may divide the whole group into smaller groups of four to six individuals..SWOT Analysis Threats No organization is immune to threats. All rights reserv ed.both in terms of pointing out what needs t o be done.
SWOT Analysis Threat Questions Check out what your competitors are doing and assess other potential challenges Are your competitors becoming stronger? Are there emerging trends that amplify o ne of your weaknesses? Do you see other external threats to your company's succe ss? Internally. do you have financial..Advanced Integrated Technologies Group. Inc. All rights reserv ed. development. or other problems? What obst acles do you face? What is your competition doing? Are the required specificatio ns for your products or services changing? Is changing technology threatening yo ur position? What policies are local and federal lawmakers backing? Do they affe ct your industry? Here are some questions to get you started © Copyright 2006 . Page 20 .
SWOT Analysis Focusing On Your Organization “Concentrating” or “focusing” in a business sense does NOT literally mean concentrating or focusing on a single miniscule product or service. 2. These are the tough decisions that enable you to grow your business a step at a time.Advanced Integrated Technologies Group. it can be painful to admit you can’t do it all. Focus and av oid becoming a BADD company by doing the following: 1. we don’t do that at this point. SWOT Enables A Focus On Your Business That Will Promote Team Discussion and Actions! © Copyright 2006 . All rights reserv ed. Significantly narrow your business f ocus for the next 6 months. we aren’t ever going to do that. nor clinging to one “winner” f orever. We do this. 3. nor not revamping an already successful (profitable) product/service to make it even better. It does mean honing in on a relatively narrow product/ service/market set where the comp any has best chance of making a profit into the foreseeable future. I n parallel. nor marketing it the same way it’s always been done. Page 21 . Dare to assess how much time and effo rt you devote to what your business is really good at and where you make the mos t money/have the most short term upside. narrow your marketing messages and make them match your products and services (very unusual but very differentiating). No.. Yup. Others do that already. Learn to say NO when appr opriate: No. Inc.
which i s a lot harder work. and look busy--versus executing. 5.. In appealing to all types of markets that you do virtually anything. It alw ays takes longer than you think it will © Copyright 2006 . Execut e. Grow organical ly for the foreseeable future. Have a sense of urgency but don’t hurry your business. do that next deal.) 4. It is a death sentence. All rights reserv ed. execute. Tell th e truth and the good stories about your business to your customers and markets. execute. resources and energi es in that key thing that you do best and generates the most profits. 6. your messag es usually become mush. you lose attention (despite any le vel of marketing funding)—you create your own marketing and sales nightmare. 7. Try it the old fashioned way for a while. Sure there are business cases to consider to purc hase highly complementary or directly competitive businesses.SWOT Analysis Focusing On Your Organization (Cont.Advanced Integrated Technologies Group. All t hings to all people is not a position. you lose credibility. Page 22 . Inc. Then invest 75% or more of your business aggregate time. but those are the exceptions versus the rules. This is the bane of BADD executives—who would rather go after that next windmill.
without a name. All rights reserv ed. & some observations about sensitive issues can be revealed this way External Oppurtunities Threats The SWOT Template is a Simple Worksheet © Copyright 2006 .. provides some protection of a nonymity.SWOT Analysis Template SWOT Analysis Internal Strengths Weaknesses Writing alone on a piece of paper. Page 23 . Inc.Advanced Integrated Technologies Group.
a SWOT confines strengths and weaknesses to your company's intern al workings while opportunities and threats refer only to the external environme nt. but ri ght-off-the bat start. Put someone in charge of spearheading it—ideally a knowledgeable consultant (s ee below) or objective insider who will take the time and be objective. WEAKNESS. WEAKNESS.. not one or two months—to complete your SWOT. Aim for about five pages: a page for each STRENGTH. Get input from at least 3-5 key people who have varying views & opinio ns © Copyright 2006 . Take one or two weeks. maximum. All rights reserv ed. Review your key Marketing & Sales materials like you’ve never seen the m before. OPPORTUNITY & THREAT). so that that they are ea sy to change and modify (and you may want to take the step of weighting the impo rtance of each STRENGTH. Focus on the present and recent past for your STRENGTHS & WEAKNESSES — and not very far into the future for your OPPORTUNITIES & THREATS: 90 to 180 day s. prioritizing your lists—digitally.SWOT Analysis Tips Traditionally. Make big lists.Advanced Integrated Technologies Group. Inc. Page 24 . keep prioritizing and then weed the lowest priority items at the end. OPPORTUNITY & THREAT as well as a page for Issues/ Questions.
All rights reserv ed. modify it as necessary. You may need to do some other f act-finding and analysis before implementing your recommendations. Page 25 . but don’t get b ogged down at the micro-level of detail.SWOT Analysis Tricks Minimize the “group grope” and meeting stuff while developing your SWOT — meet to disc uss the SWOT. not dominated by factions or individu als. all members should feel comfortable that this is a group process. and develop one or more action steps. especially if there are to be major cha nges in the organization and the content of the program. Keep “personal” issues off the list — and han dle those separately. This is important. Inc. Ask the hard questions and challenge all of your basic assumptions — none are sacred.John Wooden © Copyright 2006 .Advanced Integrated Technologies Group.. “Its what you learn after you know it all that counts!” . Be objectively critical but also don’t undersell yourself. Get the key facts but d on’t get paralyzed with analysis and fact-finding.
Inc. Steven Bona corsi has trained hundreds of Master Black Belts. Green Belts. Solution Provider Lean Six Sigma Master Bl ack Belt 3135 South Price Road..theaitgroup.2484 E-mail: firstname.lastname@example.org http://blog. and Project Sponsors and Executive Leaders in Lean Six Sigma DMAIC and Design for Le an Six Sigma process improvement methodologies. Black Belts.826.Advanced Integrated Technologies Group. AZ 85248-3549 Phone: +(1) 88 8. Page 26 .theaitgroup. All rights reserv ed. The AIT Group. Steven Bonacorsi.com/?tag=change Our Expert Consultants Can Help Your Business Growth © Copyright 2006 . Suite 115 Chandler. Inc.com http://www.About The Author Steven Bonacorsi is a Senior Master Black Belt instructor and coach.
.About The AIT Group © Copyright 2006 . Page 27 . All rights reserv ed. Inc.Advanced Integrated Technologies Group.