Let’s start with the pretty obvious. Just not to forget. SWOT analysis is a tool (not a goal, a tool!) used for analyzing situation and strategy for business / product / process etc
Here is how analysis could be condensed. A simple square tiled further in four equal squares.
As simple as the shape is also the explanation of the acronym
Could be that it is this simplicity that resembles the game of noughts & crosses that gave the model its steadfast persistence. Since its first publishing, more than half a century passed.
— TYPICAL USES
We use SWOT analysis when we need:
- to estimate the current situation of the company or activity, eg. brand position within an observed sales channel
- to find out what are the future opportunities
- to define the course for activities
Picture: Growth Analysis. SWOT could serve as a unified view of a different analysis.
Though SWOT has been instigated by acclaimed university professors working with huge corporations, its superior character today deflated toward more profane uses in smaller organizations. The key reason is the widespread availability of datasets that are not necessarily in the domain of exuberant R & D departments available only to the giant corporations.
But the simplicity of SWOT might also be its – weakness. Being a tool – there is always a danger to be used for the wrong reasons.
I’ve been using SWOT for establishing brand current positions and defining the path to a change.
In one case my client – a CPG company with national brands wanted to establish what are the opportunities for further growth in the supermarket and convenience channel. It was the SWOT that paved the way to necessary merchandising practices and smart tactics to improve.
Sometimes SWOT can also serve to describe complex situations and put the focus on the most important stuff. It helped me convince the Managing Director of a top retailer in Slovenia not to put further efforts in promotions of own label (because these efforts were on the level of the competition) but in the reshaping of the own-label lines itself.
Out of experience – which means not copy-pasted from the internet – let me list some points that could serve as a delineation between SWOT analysis and SWOT hodgepodge.
- the choice of the right factors is of utmost importance
a. you shouldn’t strive to fill all squares equally so that it looks nice (one exemption: if you are preparing an annual report for a huge corporation or government sector)
b. choice of the factors should reflect the goals: eg. customer in-store behavior links directly to a product development
2. be utterly relentless when you estimate your own weaknesses
3. take the importance of the factors into consideration
the fall of the meteorite will probably destroy your business, but how probable is that?
tax already put in the government’s procedure could seriously affect the financial viability
4. save the list of eliminated factors – might be of use next time!
5. SWOT is an analysis! Actually, a set of analysis.
If you analyze assortment than the range analysis could be a part of SWOT. Also, an analysis based on Pareto’s rule 80 / 20 could give insights. BCG analysis could serve to assess the potential of the brands (size of bubbles shows current sales of brand sales). Etc.
6. SWOT shouldn’t be the final product. Out of the conclusions you prepare Action Plan with activities and time-frames for execution. (there is an exemption: see point 1a above)
7. It’s important to discern between short- and long-term opportunities. How much time do you need to convince your partner, get the funding, develop a product? A good SWOT is realistic.
8. Again, SWOT is a tool, not an objective. As a tool, it could be used in different ways. Something has been so brilliantly shown in a “scene with monkeys” in Kubrick’s predictive movie Odyssea 2001.