What is a SWOT Analysis?
A SWOT analysis is a commonly used tool that helps organisations to understand their current situation, both internally and externally.
The SWOT analysis helps to develop a comprehensive picture of a company’s current situation. This helps to identify potential areas for improvement. It can also help to evaluate the potential success of a proposed strategy. In additions, it helps to identify potential risks associated with a proposed course of action.
It is, therefore, an important tool for of the strategy creation process. The SWOT analysis helps to examine and analyse the entire organisation. This includes looking at it does well and the areas where it needs to improve. It also considers what external factors to account for when creating the strategy.
The SWOT analysis is, therefore, a very important part of the strategy creation processes. It helps answer the ‘where are we?’ question. This then helps us answer the question ‘how do we get from where we are to where we want to be?’. In addition, it is the answers to these questions that identify the activities the organisation needs to take to achieve its objectives and goals.
SWOT is an acronym for:
Strengths
Identify and understanding the things that the organisation is good at is an important aspect of the strategy creation process. In particular, the strengths that support the organisations goals and objectives are critical to supporting and sustaining the strategy model.
Weaknesses
Locate issues that the organisation needs to improve upon. It is especially important for those that have the potential to negatively impact the future development of the organisation.
Opportunities
Find and evaluate events that are happening or will happen in the external environment that would benefit the organisations strategic future.
Threats
The things that are happening or may happen in the external environment that would have a negative impact on the future development of the organisation.
Our approach to the SWOT analysis.
A conventional SWOT analysis captures information as a set of statements. The problem is that contextual information normally lost. In addition, statements surfaced during the analysis are not directly linked to the business strategy.
While the information we collect is the same, we create causal links amongst the various elements of the SWOT analysis. We also link the elements of the SWOT to the relevant elements of the strategy model. This effectively creates a map of the SWOT. It also integrates that map into the overall strategy model. The result is a better understanding of the issues and how they affect the business goals and objectives.
For move information, read ‘How to make the most of a SWOT Analysis’…