1.2 THE STRATEGIST IN YOU: SWOT Analysis

(SHORT NOTES FROM STRATEGY TOOLS:

Core Strategy Tools at http://www.mindtools.com)

 

Discover New Opportunities. Manage and Eliminate Threats

SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the Opportunities open to you and the Threats you face.

SWOT can help uncover opportunities that can be exploited.  By understanding the weaknesses, threats to business can be managed and eliminated.  by looking at yourself and your competitors using the SWOT framework, you can start to craft a strategy to distinguish from competitors.  Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate to external factors.

Originated by Albert S Humphrey in the 1960s, SWOT Analysis is as useful and as a simple icebreaker helping people get together to "kick off" strategy formulation, or in a more sophisticated way as a serious strategy tool.

HELPFUL QUESTION TO HELP CARRY OUT SWOT
Strengths: ·        What advantages does your organization have? ·        What do you do better than anyone else? ·        What unique or lowest-cost resources can you draw upon that others can't? ·        What do people in your market see as your strengths? ·        What factors mean that you "get the sale"? ·        What is your organization's Unique Selling Proposition   (USP)?	Weaknesses: ·        What could you improve? ·        What should you avoid? ·        What are people in your market likely to see as weaknesses? ·        What factors lose you sales?
Opportunities: ·        What good opportunities can you spot? ·        What interesting trends are you aware of? Useful opportunities can come from such things as: ·        Changes in technology and markets on both a broad and narrow scale. ·        Changes in government policy related to your field. ·        Changes in social patterns, population profiles, lifestyle changes, and so on. ·        Local events.	Threats ·        What obstacles do you face? ·        What are your competitors doing? ·        Are quality standards or specifications for your job, products or services changing? ·        Is changing technology threatening your position? ·        Do you have bad debt or cash-flow problems? ·        Could any of your weaknesses seriously threaten your business?

 

SWOT Analysis is a simple but useful framework for analyzing your organization's strengths and weaknesses, and the opportunities and threats.  It helps you focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you.  SWOT Analysis can be used to "kick off" strategy formulation, or in a more sophisticated way as a serious strategy tool.

TOWS Analysis is a variant of the classic business tool, SWOT Analysis.  TOWS and SWOT are acronyms for different arrangements of the words Strengths, Weaknesses, Opportunities and Threats.