Here is how analysis could be condensed. A simple square tiled in four equal squares.
The explanation of the acronym is simple as well:
- S (trengths)
- W (eaknesses)
- O (pportunities)
- T (hreats)
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.
At Omnibus we use SWOT analysis mainly 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 course 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 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 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 not to put further efforts in promotions of own label (because these efforts were on the level of the competition) but rather in the reshaping of the own-label lines itself.
Recent use: repositioning a prototype store to refresh the business model for a chain of restaurant/stores (included perspectives on changed habits due to coronavirus).
HOW LONG DOES IT TAKE TO PREPARE SWOT?
Depending on the scope and preparation level, it might take 60 minutes for the sketching out of an otherwise complex problem like store assessment -> check our online sessions, or one month for a SWOT full of analysis and stakeholders included -> check our workshops.
SWOT AS A SPRINGBOARD FOR A STRATEGY
An overall strategy usually starts with a vision – defining and stating future results we aim for. Out of the expected results, we get clear goals and objectives.
Then comes SWOT which provides the framework for establishing the current situation (both internal and external, like competition and market trends) and connecting it with future opportunities.
When we have goals clearly set and SWOT firmly in place, we might write down an actionable strategy with measures of success.
8 DO’S AND DONT’S OF SWOT
For those who’d like to put a little SWOT in practice, let me list some points that could in our experience delineate 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 (one exemption: if you are preparing an annual report for a huge corporation or government sector department)
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 – 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 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, 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.
At Omnibus SWOT’s are regular dishes on our table. In fact, 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.