SWOT Analysis Operational Definitions

SWOT Analysis Operational Definitions

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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 analysisConsider 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:

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, 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 competitionThreats - 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

Oppurtunities Threats

SWOT AnalysisInternal

Strengths Weaknesses

External

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

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.

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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: [email protected]

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About The AIT Group

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SWOT Analysis Operational Definitions