What is SWOT analysis? (Alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture.
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A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.
Strengths: characteristics of the business or project that give it an advantage over others.
Weaknesses: are characteristics that place the team at a disadvantage relative to others.
Opportunities: elements that the project could exploit to its advantage. Threats: elements in the environment that could cause trouble for the business or project Identification of SWOTs is important because they can inform later steps in planning to achieve the objective.
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How to use SWOT Analysis?
1- Create a four box matrix, with one box representing one of each of the categories of the SWOT analysis–strengths, weaknesses, opportunities and threats. 2- Hold a brainstorming meeting with other strategic planners and spend 10 to 15 minutes coming up with ideas to put in each category.
3-Observe the results of the brainstorming and write two or three things that represent the most important ideas from each category. For example, a good brand name, strong customer relationships, intellectual property rights, and supply chain access are great strengths.
If the company is lacking in any of these areas, they could be large weaknesses. Opportunities often include things like new customer niches that can be tapped into, new products and technology, or new beneficial legislation. Threats could be unfavorable technology, such as a close substitute to your product or service, unfavorable regulations or bad publicity.
4- Next brainstorm ways to best take advantage or improve each of these important areas. For each strengths, think “How can we make this strength even stronger?” For weaknesses, try to come up with ways to reduce shortcomings, or turn weaknesses into strengths.
For opportunities, think of ways that opportunities can be harnessed and turned into strength. Finally, think of ways to eliminate threats, or turn them into opportunities. It is best to tap into people from many different departments, such as legal, finance, human resources and marketing so that the broadest range of considerations is made when brainstorming.
Experts from each area will also know how to best implement plans to take advantage of the SWOT results. 5- Use the results of the SWOT session to guide strategic decisions in the business. Over time SWOT results will change as the business environment changes, so it can be useful to hold new brainstorming sessions on a regular basis.
How to use SWOT Analysis results?
1- Form your planning team. The team should include key members of your operating staff and represent a diverse section of your company.
2- Consider conducting a smaller SWOT analysis on a specific aspect of the business to prime your team for the SWOT evaluation that is company-wide. 3- Set meeting times. Make sure you schedule plenty of time for the team to look over the SWOT analysis.
Planning these meetings for the same time each week will help ensure everyone gets into the routine. Although you could also plan a weekend retreat, spreading the meetings out may help your staff generate new ideas and not get stuck in a rut.
4- Make sure everyone is on the same page. Your staff should have trust in each other that their ideas will be respected. Each member should also have the desire to make changes to the company. 5- Define goals for the evaluation at the first meeting.
Once everyone has a chance to look over the SWOT analysis, definitive goals should be set. For example, “create three new procedures to ensure customer satisfaction” is a more tangible goal than “plan to increase customer satisfaction.” 6- Look over the analysis. See if any line items can fit into multiple categories.
For example, a threat of a competitor opening up shop across the street could be an opportunity to solidify your standing in the community by providing exemplary service. 7- Collect data. Although a strength of your business may be your ability to effectively sell to a minority group, that strength will become a weakness if statistics demonstrate a negative growth of the minority group in your community
8- Decide what you need to improve on. Make a list of all of these
goals, and then create a SMART objective for each one.
Make SMART Objectives
Know that SMART stands for specific, measurable, achievable, realistic and time-bound.
9- Define specific objectives. You will need to have objectives with tangible results. One goal may have several objectives—for example, improving your customer service may include performing an annual survey, conducting monthly staff meetings on improving service and hiring more friendly candidates.
10- Decide what you will use to measure your objective. Without standards, there will be no way of demonstrating success or failure of each objective. 11- Brainstorm whether the objective is achievable and how it will be achieved.
If your objective is to conduct monthly staff meetings on customer service, then it would be achievable if an appropriate trainer were identified and if time and wages could be allocated to the project. 12- Put some realism into it. Your team will need to really look at each objective to determine if it is realistic. Monthly staff meetings may not seem like a big deal in the meeting room, but coming up with a time that everyone can meet may be.
13- Come up with a timeline. Objectives should be time-bound with start and end dates. 14- Rewrite each objective to take into consideration all of the SMART components.
For example, the goal of improving customer service will be transformed into the SMART objective of “Hire a consultant to conduct a staff-wide training on customer service on the first Sunday of each month from January to November of 2010.