Read my new book, An Enlightened Entrepreneur:
57 Meditations on Kicking @$$ in Business and Life"4.8/5 stars" on Amazon

SWOT Analysis

I’ve been using SWOT Analysis for strategic planning lately and I thought I’d share the basics of it.

What is a SWOT Analysis

SWOT is a strategic planning tool. The acronym SWOT stands for:

S= Strengths

W = Weaknesses

O = Opportunities

T = Threats

The importance of a SWOT Analysis

A SWOT Analysis is a great exercise to help determine your tactics or execution of an objective.

The more you can prepare before you jump into your tactics (or execution), the better off your results will be.

How to do a SWOT Analysis

First, pick your topic (e.g. your topic might be broad such as on your business/company overall (a “Company SWOT Analysis” or something more specific such as a department in your business (e.g. a “Marketing SWOT Analysis) or it could be for yourself as an individual (a “Personal SWOT Analysis”).

Next you pick your objective. For example, if you’re doing a Company SWOT Analysis your objective may be to double the business within the next three years.

Now do the Strengths, Weaknesses, Opportunities and Threats related to that topic or objective:

  • Strengths — These are attributes that you or your company possess that would be helpful in achieving the objective.
  • Weaknesses — These are attributes that you or your business have that are harmful to achieving the objective.
  • Opportunities — These are the external circumstances that are helpful to you achieving the objective.
  • Threats — These are external circumstances that could damage the performance of your objective.

Next, ask yourself if your objective is achievable given your strengths, weaknesses, opportunities and threats.

Is SWOT objective achievable?

If the answer is no, you have to revise your objective and do another SWOT.

If your answer is yes, then you can now move into discussing the tactics related to your strengths, weaknesses, opportunities and threats.

Specifically, you’ll want to ask yourself the following questions:

  1. How can we leverage each one of our strengths?
  2. How can we improve upon each weakness?
  3. How we can capitalize on each opportunity?
  4. How can we minimize each threat?

A SWOT Analysis Example

[Check out my SWOT Analysis Examples posting to see larger company SWOT Analysis examples]

Here’s a summary of a general Business SWOT Analysis I did on our start up Mojam about ten years ago.

Our objective was to double the revenue of the business within twelve months.

Strengths

  • Amazing team
  • Large quantity of product
  • Well-connected investors
  • Good at partnering

Weaknesses

  • Low amount of capital
  • Mediocre product quality
  • Geographically fragmented team

Opportunities

  • Yahoo is interesting in partnering with us
  • Company can turn a profit with just a few more customers
  • Smaller competitor is distressed and may want to sell
  • New revenue sources such as merchandise sales are right around the corner

Threats

  • A small new competitor has entered the space
  • We may not make payroll if we can not raise more capital or grow our business

When we asked ourselves if the objective of doubling our business was achievable given these strengths, weaknesses, opportunities and threats, the answer was yes…so we moved on to answering the four questions on each SWOT.

E.g.:

  • How can we leverage our amazing team?
  • How can we exploit our large quantity of product?
  • How can we grow our capital?
  • How can we improve our product quality?
  • How can we close the Yahoo deal?
  • How can we start merchandising as a new revenue source?
  • How can we combat the new competitor that entered the space?
  • How can we buy more time to make payroll?

Now you’re into tactics and execution and that requires prioritization, time lines, business plans, etc….or, in other words, you just go do all the things you just said you shoud do in your answers!

Who should carry out the SWOT Analysis exercise?

Ideally it’s a cross functional team (e.g. someone in sales, marketing, finance, technology, etc.)

Who Invented SWOT?

Most people credit Albert S. Humphrey, a business and management consultant who also founded the Stakeholder Concept and Team Action Management (TAM) Concept.

note: Some people mistakenly call it “SWAT” Analysis (SWAT is an acronym for special weapons and tactics started by the Los Angeles Police Department around 1968 (coincidentally, Albert Humphrey began popularizing SWOT right around the same time (in the late 1960′s!))

A great definition of SWOT can be found at SWOT Analysis Wikipedia.

Good luck with your SWOT!

20 Comments

  • http://unlimited-job-postings.com/2009/08/6-creative-ways-to-stand-out-in-the-job-search-2/ 6 Creative Ways to Stand Out in the Job Search! – Unlimited Job Postings powered by Job Board Engine

    [...] 1.  Preparation = SWOT Analysis:  [...]

  • http://cornonthejob.com/2009/08/27/6-creative-ways-to-stand-out-in-the-job-search-guest-blog-by-peggy-mckee/ 6 Creative Ways to Stand Out in the Job Search! (guest blog by Peggy McKee) « Corn On The Job

    [...] 1.  Preparation = SWOT Analysis:  [...]

  • http://job-search-success-secrets.com/blog/6-creative-ways-to-stand-out-in-the-job-search 6 Creative Ways to Stand Out in the Job Search! | Job Search Success Secrets

    [...] 1.  Preparation = SWOT Analysis:  [...]

  • http://www.cornonthejob.com/guest-blogs/6-creative-ways-to-stand-out-in-the-job-search-guest-blog-by-peggy-mckee/ 6 Creative Ways to Stand Out in the Job Search! (guest blog by Peggy McKee)

    [...] 1.  Preparation = SWOT Analysis:  [...]

  • http://businesseshome.net/ Lucy

    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Lucy

    http://dataentryjob-s.com

  • http://businesseshome.net/ Lucy

    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Lucy

    http://dataentryjob-s.com

  • http://businesseshome.net/ Lucy

    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Lucy

    http://dataentryjob-s.com

  • http://andywergedal.wordpress.com/2010/06/24/6-creative-ways-to-stand-out-in-the-job-search-medical-sales-recruiter-%e2%80%93-tips-quips/ 6 Creative Ways to Stand Out in the Job Search! : Medical Sales Recruiter – Tips & Quips « ANDYWERGEDAL

    [...] 1.  Preparation = SWOT Analysis: [...]

  • http://robdkelly.com/work-environment/10-tips-for-leading-a-virtual-business/ The Pros & Cons of Working Virtually: Inside Tips From The Largest Virtual Team in The World? | Rob Kelly

    [...] Regular in-person get-togethers (including for Strategic Planning) — I’ve found it useful to get our smaller teams (e.g. our Management Team) together in person on a regular basis (quarterly or monthly is ideal if you can afford it) — in person meetings are most effective for Strategic Planning meetings (such as setting 3 year plans, 2-year plans, 1-year plans, etc.) where you need to do exercises such as a SWOT Analysis. [...]

  • http://robdkelly.com/blogging/google-wonder-wheel-tool/ How To Use The Google Wonder Wheel Tool To Generate More Traffic | Rob Kelly

    [...] example, I wrote an article two articles on the SWOT strategic planning tool (SWOT Analysis and SWOT Analysis Examples) the strategic planning tool. And when I searched “SWOT” on [...]

  • http://robdkelly.com/getting-things-done/pest-analysis/ What is PEST Analysis, PEST Analysis Definitions & PEST Analysis Examples | Rob Kelly

    [...] been receiving a lot of attention to my articles on strategic planning tools such as SWOT Analysis, Fishbone Analysis and DACI To Get Things [...]

  • http://robdkelly.com/getting-things-done/swot-analysis-examples/ Links to Free SWOT Analysis Examples of Google, Coca Cola, Walmart, Dell, McDonald’s, Starbucks, Pizza Hut & More. | Rob Kelly

    [...] bunch of people checked out my article on SWOT Analysis and asked me for more examples of this powerful strategic planning [...]

  • Jethro_VIRGO1800

    I used this analysis in my department to know our SWOT,but this analysis is being ignored by our general manager in a construction firm because of his own reason that this type of analysis is not doing good as a result or output.

  • http://www.robdkelly.com Rob Kelly

    Good for you for trying to implement the SWOT Analysis, Jethro. SWOTs can work just for you (as an individual) and some of your other team members (even if your manager isn’t buying in).

    And perhaps your manager will come around!

  • http://robdkelly.com/blog/getting-things-done/gap-analysis/ 5 Simple Steps On How To Do A Gap Analysis | Rob Kelly

    [...] as physical goods or marketing collateral) you need.Minutes— The time you need.Or you could use a SWOT Analysis and simply list out your:Strengths, Weakness, Opportunities and Threats related to filling your [...]

  • http://robdkelly.com/blog/getting-things-done/fishbone-analysis/ How To Do A Fishbone Analysis (Diagram, Template & Example) | Rob Kelly

    [...] Ishikawa biographyIf you like this article, you will probably also like this article I wrote on the SWOT Analysis tool. Tweet 11 Comments http://jazzpresentation.com/5-steps-to-build-a-fishbone-diagram/ SnehanIts [...]

  • Kevin Arlinkon

    Hey! Thanks for the Blog post! I’m finding it very
    interesting. I’m going to bookmark this blog and return. Keep up the great work, have a great day!
     

    Swot Analysis

  • http://robdkelly.com/blog/leadership/porters-five-forces/ An Insider’s View of Michael Porter’s 5 Competitive Forces Model Including Example | Rob Kelly

    [...] level dynamics, PEST(O) is useful in assessing external factors at the most macro of levels.SWOT also helps to identify and match internal strengths and weaknesses to external opportunities and [...]

  • Phil G

    amazing, thanks for share this information, very rich in methods
    God Bless

  • Karren Barlow

    Thanks for the info! I have also recently found a site that has a great Personal SWOT Analysis Example and it is very helpful and easy to use! I would recommend it to all!