Some things are so simple, yet efficient that they are destined to stay around. Like the game of noughts & droughts. Or SWOT – a business tool (not a goal, a tool!) used for analyzing the situation and preparing a strategy for business models / products / brands / projects etc.
More than half a century after its initial publishing, SWOT is alive & well. Digital times didn’t hurt. On the contrary, SWOT refreshed itself through the startup community – showing its fit for its agile mindset.
SIMPLE & POWERFUL REPRESENTATION
Here is how analysis could be condensed. A simple square is tiled in four equal squares.
The explanation of the acronym is simple as well:
- S (trengths) – our advantages over others, the points we feel strong, better than competition
- W (eaknesses) – our disadvantages over others, where we are vulnerable
- O (pportunities) – where do we have chance for progress, advancement (usually due to favourable external circumstances)
- T (hreats) – elements that could cause us trouble
INTERNAL AND EXTERNAL FACTORS
The pair SW is usually internal: it is within our reach, thus we’re able to influence it.
The other pair OT is external, mostly outside of our reach, thus we’re more or less just in the position of accepting it.
TYPICAL USES OF SWOT ANALYSIS
Though SWOT has been instigated by acclaimed university professors working with huge corporations, SWOT provides a framework for infinite uses. From your future journey or planned investment or even partnerships. Very versatile and could be easily used for personal projects as well. Look for our short courses where we can lead you through the process or give you the feedback for improving your SWOT.
At Omnibus we use SWOT analysis also for the following:
- 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 for new endeavors, eg. a newly launched product or innovative store format
- to jumpstart a project and define the roadmap for project activities: how do we get from point A (current) to point B (where we’d like to be)
In one case our client – a consumer packaged goods (CPG) company with national brands – wanted to establish what are opportunities for further growth in the supermarket and convenience channel. SWOT paved us the way for necessary merchandising practices and smart tactics to improve.
Sometimes SWOT can also serve to vividly describe complex situations and put the focus on the most important stuff. It helped me convince the Managing Director of a top national retailer to limit the efforts and investments for promotions of own label (because these efforts were on the level of the competition) and rather reshape the labels itself.
Recent SWOT use: creating business model for a chain of restaurant/stores. Perspectives on changed habits due to coronavirus included.
HOW LONG DOES IT TAKE TO PREPARE SWOT?
Depending on the scope and preparation level, it might take only 60 minutes for the sketching out of an otherwise complex problem like store assessment.
On the other hand it might take a whole month for a SWOT full of analysis, supporting documents and many stakeholders included -> for more check our workshops.
Anyway the sketches should be simple, informed, and better done quickly thus giving enough space for creative ideas.
SWOT AS A SPRINGBOARD FOR A BUSINESS STRATEGY
SWOT provides the framework for establishing the current situation: both internal and external, like competition and market trends.
By identifying weak points and creating ideas to overcome them, it serves as a roadmap that connects starting point A (where we are?) with the destination point B (where we’d like to be).
Identifying key challenges to overcome is essential.
Set between the current situation and key challenges to overcome is a strategy – a set of guiding lines to confront and succesfully solve the key challenges.
With SWOT firmly in place, and key challenges clearly set, we might write down an actionable strategy with measures of success.
8 TIPS FOR DESIGNING SUCCESSFUL SWOT ANALYSIS
Sure, SWOT is not immune to all sorts of oversimplifications. The matrix itself is simple but the contents need to be properly prepared. The experience tells us one common “sin” is to oust proper analysis with wishful thinking.
For those who’d like to put a little SWOT in practice, the list below delineates the border between a SWOT analysis and a SWOT hodgepodge.
1. 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
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 weaknesses – better do it here at the initial stage, then later when you’re deep into the project (investing time & money to find out what you could learn if being honest enough)
3. take the importance of the factors into consideration
– the fall of the meteorite will probably destroy your business, but how probable is that? -> not important
– tax already put in the government’s procedure could seriously affect the financial viability of your endeavors -> important
4. save the list of eliminated factors – might be of use next time!
5. SWOT is an analysis! Actually, a set of analyses.
If you analyze assortment then 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, responsibilities, and time-frames for execution. (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.
KICK-START A PROJECT BY SWOTTING
You can start right away. Print out our matrix or just take a piece of paper and draw an own simple matrix with a pencil. Go over the 4 elements and voila – you have a simple picture of the current situation with a slight view on the future development. You might also write down the additional open questions and analysis needed to find the answer. Sketching is very important step!
If you’d like to improve your Swot skills, you can also try us!
At Omnibus SWOTs are regular dishes on the table. We feel SWOT’s are our specialty. A whole lot of analysis & strategical thinking with a crispy crust of imagination. Delicious stuff, believe us. We’d be glad to cook one with you and then turn it into a firm actionable strategy in one of our online sessions or workshops.
Hey. Would you like to learn more and put the knowledge at work in your own project?
From January to March 2023 I have time slots available for individual or group online courses.
a) lead you hands-on through the basic concepts of SWOT for personal or business use: 45 minutes
b) write a personalized SWOT down with you
c) lead you through the whole process: 3 x 45 minutes, with final 1-page opinion on your own SWOT. The extended course also includes how-to’s: dynamic pairs used for actionable strategies, how to create a project roadmap, adding creative decisions and overview of key analyses.
If you’d like to join, don’t hesitate and contact me by filling this simple form.