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SWOT Analysis

Operational Definitions
SWOT Analysis
Operational Definitions
A STRENGTH is something that you truly do well, excel at versus the competition, can
build on; something that truly differentiates your business, a key metric that is improving,
etc. Most companies do surprisingly bad job of identifying what they are really good at
doing. Every company has strengths. A strength can be something very concrete like a
large, growing customer base or less measurable: a well-run customer service
department that keeps customers satisfied (thus helping both retention and new sales).
Note that a STRENGTH can also be a weakness: e.g. you’re Number One in your market
is a STRENGTH, but if you are taking that for granted—that’s also a weakness.
A Weakness is a real gap, a deficiency, a problem, or a key metric that is going south;
something you’re not doing very well and that you should be doing better; something
that’s dated that no longer applies—even though it used to; something important that you
really don’t know or aren’t sure about. In fact, one good outcome of a SWOT is to
discover what you really don’t know and then do something about it. A weakness can be
very tangible and concrete or it can be an attitude: e.g. a complete unwillingness to invest
in any marketing initiatives or a lack of understanding what to do.

The best way to identify STRENGTHS, WEAKNESSES,


OPPORTUNITIES & THREATS is to ask the right questions
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SWOT Analysis
Operational Definitions (Cont.)
An OPPORTUNITY is a favorable external condition; something (that you haven’t acted
on or taken advantage yet) that could impact you positively. Opportunities are new ways
that your exploit your STRENGTHS, WEAKNESSES & THREATS--new things that that
you can do to potentially improve your business—that turn into recommendations and
actions. This list becomes the most important part of your SWOT for prioritizing and
determining what next steps to take.
A THREAT is something external to your business that can potentially impact you
negatively: competitors (actually doing specific things vs. just being there), changing
conditions in your particular marketplace, the overall economy, government regulations,
etc. Threats are part of the playing field that you can’t ignore. They are part of the context
of your business. Some threats, though, are internal: e.g. hanging onto the status quo
when change is required or the impact on remaining if you decide to cut costs (maybe an
OPPORTUNITY).
You should also make an ongoing list of Issues and questions that inevitably pop-up as a result of
developing the STRENGTHS, WEAKNESSES, OPPORTUNITIES & THREATS lists—for further
analysis and discussion—and possible incorporation into your SWOT. Generally, STRENGTHS &
WEAKNESSES are current in timeframe, and OPPORTUNITIES & THREATS are in the future—
starting with tomorrow.
The purpose of strategy is to be really clear before you take the direction.
The point of a SWOT analysis is to have the best shot at a grounded plan
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SWOT Analysis
Strengths
Every organization has some strength. In some cases this is obvious, for example,
dominant market shares. In other cases, it is a matter of perspective, for instance, a
company is very small and hence has the ability to move fast. It is important to note
that companies that are in a bad position also have strengths. Whether these
strengths are adequate is an issue for analysis.
Define areas you excel in, such as the company’s core competency and resource
analysis
Consider strengths from your own point of view and from the point of view of the
people you deal with. Don't be modest - be realistic. If you are having any difficulty
with this, try writing down a list of your characteristics. Some of these will hopefully be
strengths!
Strengths will include the wisdom and experiences learned by the staff. Some of their
skills may be valuable for continuing in the same way, but may be a hindrance to
making an organizational or program change.

SWOT will help you to focus on your strengths, minimize


weaknesses, and take the greatest possible advantage of
opportunities available
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SWOT Analysis
Weaknesses
Every organization also has some weakness. In some cases, this is obvious; say for
example, a stricter regulatory environment. In other cases, it is a matter of perspective,
for example, a company has 99% market share and is open to attack from every new
player. It is important to note that companies that are extremely competent in what they
do, also have weaknesses. How badly these weaknesses will affect the company is a
matter of analysis.
Consider this from an internal and external basis:
9 Do other people seem to perceive weaknesses that you do not see?
9 Are your competitors doing any better than you?
It is best to be realistic now, and face any unpleasant truths as soon as possible.

Think of a SWOT as a Cliffs Notes version of deconstructing your


business, taking a fresh look, and jumpstarting your company to
steer it a new direction to grow your business
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SWOT Analysis
Opportunities
All organizations have some opportunities that they can gain from. These could range
from diversification to sale of operations. Identifying hidden opportunities is the mark of
an astute analyst.
Opportunities - Traditionally, a SWOT looks only at the external environment for
opportunities. I suggest you look externally for areas your competitors are not fully
covering, then go a step further and think how to match these to your internal
strengths. Try to uncover areas where your strengths are not being fully utilized.
Apart from the kinds of responses desired, the SWOT can be used in other contexts
than transformation of a program, and is recommended to be used in annual or bi-
annual review meetings.
The aim is to provide a non-threatening situation for participants to contribute as freely
and without inhibitions as feasible, all the strengths, weaknesses, opportunities and
threats that they can recall.
If SWOT is based upon verifiable observations of the conditions and attributes that will
contribute to success, and is realistic in identifying what may stand in the way of
success, then it is more likely to succeed.
SWOT analysis highlights the key issues, and the links between
issues, which are related to a problem
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SWOT Analysis
Threats
No organization is immune to threats. These could be internal, such as falling
productivity. Or they could be external, such as lower priced international competition
Threats - As with opportunities, threats in a traditional SWOT analysis are considered
an external force. By looking both inside and outside of your company for things that
could damage your business, however, you may be better able to see the big picture.
In a variation of the method, the facilitator may divide the whole group into smaller
groups of four to six individuals, provide them with blank newsprint and markers, and
ask them to come up with small group contributions. In this case, the small groups are
best chosen randomly.
One drawback to this is that some individuals might be reticent at contributing in front of
friends, people with whom they work closely, their supervisors or persons they
supervise; the advantage is that the total number of contributions is reduced because
there is less duplication, and some persons contribute more in a small group discussion
than they would alone in front of a piece of paper.
Carrying out this analysis will often be illuminating - both in terms of pointing out what
needs to be done, and in putting problems into perspective.
It is by understanding the key issues that a solution to a problem can
be achieved
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SWOT Analysis
Template
SWOT Analysis
Internal
Strengths Weaknesses

Writing alone on a piece of paper, without a name, provides


some protection of anonymity, & some observations about
sensitive issues can be revealed this way
External
Oppurtunities Threats

The SWOT Template is a Simple Worksheet


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About The Author

Steven Bonacorsi is a Senior Master Black Belt instructor and


coach. Steven Bonacorsi has trained hundreds of Master
Black Belts, Black Belts, Green Belts, and Project Sponsors
and Executive Leaders in Lean Six Sigma DMAIC and
Design for Lean Six Sigma process improvement
methodologies.

The AIT Group, Inc.


Steven Bonacorsi, Solution Provider
Lean Six Sigma Master Black Belt
3135 South Price Road, Suite 115
Chandler, AZ 85248-3549
Phone: +(1) 888.826.2484
E-mail: americas@theaitgroup.com
http://www.theaitgroup.com
http://blog.theaitgroup.com/?tag=change

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About The AIT Group

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