SWOT analysis
SWOT
• A widely used framework for organizing and
using data and information gained from situation
analysis
• Encompasses both internal and external
environments
• One of the most effective tools in the analysis of
environmental data and information
SWOT description
• A SWOT analysis generates information that is
helpful in matching an organization’s or a group’s
goals, programs, and capacities to the social
environment in which they operate
• It is an instrument within strategic planning
• When combined with a dialogue, it is a
participatory process
SWOT
• Factors affecting an organization can usually be
classified as:
• Internal factors
– Strengths (S) Strengths Weaknesses
– Weaknesses (W)
• External factors
– Opportunities (O) Opportunities Threats
– Threats (T)
SWOT: internal factors
• Strengths
– Positive tangible and intangible attributes, internal to
an organization. They are within the organization’s
control
• Weaknesses
– Factors that are within an organization’s control that
detract from its ability to attain the core goal. In which
areas might the organization improve?
SWOT: external factors
• Opportunities
– External attractive factors that represent the reason
for an organization to exist and develop. What
opportunities exist in the environment which will
propel the organization?
– Identify them by their “time frames”
• Threats
– External factors, beyond an organization’s control,
which could place the organization’s mission or
operation at risk. The organization may benefit by
having contingency plans to address them should
they occur
– Classify them by their “seriousness” and “probability
of occurrence”
For the external factors
Seriousness of Impact
Low High
Minimum Must
High resources if plan
any for
Probability of
occurrence
Maintain
Low Forget
flexibility in
it
plan
Create a plan of action
• What steps can you take to:
– Capitalize on your strengths
– Overcome or minimize your weaknesses
– Take advantage of some new opportunities
– Respond to the threats
• Set goals and objectives, like with any other plan
Major benefits of SWOT analyses
• Simplicity
• Flexibility
• Integration and synthesis
• Collaboration
• Lower costs
For a productive SWOT analysis
• Stay focused. Be specific and avoid grey areas.
Keep your swot short and simple. Avoid
complexity and over analysis
• Collaborate with other functional areas
• Examine issues from the customers’/
stakeholders’ perspective
• Look for causes, not characteristics
• Separate internal issues from external issues
Stay focused
• It can be a mistake to complete just one generic
SWOT analysis for the entire organization
• When we say SWOT analysis, we mean SWOT
analyses
Collaborate with
other functional areas
• Information generated from the SWOT analysis
can be shared across functional areas
• SWOT analysis can generate communication
between managers that ordinarily would not
communicate
– Creates and environment for creativity and innovation
Examine issues from
stakeholders’ perspectives
• To do this, the analyst should ask:
– What do stakeholders (and non-stakeholders) believe
about us as an organization?
– What do stakeholders (and non-stakeholders) think of
our product quality, service quality, customer service,
price, overall value, convenience, and promotional
messages in comparison to our competitors?
– What is the relative importance of these issues as
stakeholders see them?
• Taking the stakeholders’ perspective is the
cornerstone of a well done SWOT analysis
Look for causes not characteristics
• Causes for each issue in a SWOT analysis can
often be found in the organization’s and
competitors’ resources
• Major types of resources:
– Financial
– Organizational
– Intellectual
– Informational
– Legal
– Relational
– Human
– Reputation
Separate internal
and external issues
• Failure to understand the difference between
internal and external issues is one of the major
reasons for a poorly conducted SWOT analysis
– Know yourself
– Know your customer/stakeholder
– Know your competitors
– Know your environment
The elements of a SWOT analysis
• Strengths and weaknesses
– Scale and cost economies
– Size and financial resources
– Intellectual, legal, and value of reputation
• Opportunities and threats
– Trends in the competitive environment
– Trends in the technological environment
– Trends in the socio-cultural environment
SWOT-driven planning
1. The assessment of strengths and weaknesses should
look beyond products, services and resources to
examine processes that meet customers’ or
stakeholders’ needs
2. Achieving goals and objectives depends on
transforming strengths into capabilities by matching
them with opportunities
3. Weaknesses can be converted into strengths with
strategic investment. Threats can be converted into
opportunities with the right resources
4. Weaknesses that cannot be converted become
limitations which must be minimized if obvious or
meaningful to customers or stakeholders
The SWOT matrix
Caution
• SWOT analysis can be very subjective. Do not
rely too much on it. Two people rarely come up
with the same final version of a SWOT
• Use it as a guide and not as a prescription
