How to Facilitate SWOT Analysis

A SWOT analysis is an approach commonly used in organizational settings to facilitate decision making. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. By mapping out these factors, organizations can assess internal and external factors that can either assist them in achieving objectives, or present obstacles that must be overcome. While SWOT analysis is conceptually simple, the process requires some effort to do it well.
Difficulty: Moderately Easy
Instructions

   1.Explain the goal of SWOT analysis to the exercise participants. This will help them identify relevant factors that fit into the SWOT categories.
   2.Split up the participants into groups. Each group should have no more than four participants.
   3.Give each group of participants a sheet of paper on which you have previously drawn a blank SWOT matrix. This is a table with two rows and two columns, where the left column consists of internal factors (strengths and weakness on the top and bottom row, respectively), and the right column has the external factors (opportunities and threats on the top and bottom row, respectively).
   4. Ask each group of participants to jot down factors that belong in the respective cells in the table. Give them a predetermined amount of time to work on it.
   5. Draw a large version of the blank SWOT matrix on the flip chart. Ask a member of each group in turn to come up to the flip chart, and write their group's results in the respective cells, using a different colored marker for each cell. Also ask them to explain to everyone their rationale for the factors they identified.
   6. Allow some time for free discussion, then consolidate the results into a set of strengths, weaknesses, opportunities, and threats in which all participants can agree.

The SWOT Analysis Technique

A SWOT analysis is a strategic planning technique that involves looking at a company's internal situation and the external business environment to determine the company's strengths, weaknesses, opportunities and threats with regard to a particular goal.

      Strengths
   1. Strengths are internal factors that will assist in achieving the desired goal. Patents, supplier relationships, brand recognition and reputation are all examples of strengths.
      Weaknesses
   2. Weaknesses are internal factors that may interfere with achievement of the desired goal. Lack of internal knowledge and skills, poor reputation and high cost structure are some examples of weaknesses.
      Opportunities
   3. Opportunities are external factors or conditions favorable to achieving the desired goal. Some examples of opportunities are loosened government regulations, new technologies and increased consumer demand.
      Threats
   4. Threats are external factors or conditions unfavorable to achieving the desired goal. Some examples of threats are tightened governmental regulations, marketplace competition and shifting consumer tastes.
      Using the SWOT Analysis
   5. When the SWOT analysis is complete, the management team can review the various factors and determine whether it's possible and feasible to pursue the stated goal. If so, project managers should develop a plan to capitalize on each of the strengths and opportunities and mitigate each of the weaknesses and threats.

How to Write a Good SWOT Analysis

Writing a SWOT analysis is a frequent need in many areas of business, from product development to marketing. SWOT is the acronym for Strengths, Weaknesses, Opportunities and Threats. Normally, a SWOT analysis takes the form of a four-part grid, addressing each of the four factors. Basic SWOT analyses are often off-the-cuff exercises, leading to a simple chart, without adequate perspective on how best to react to threats and opportunities, and where strengths and weaknesses originated. A good SWOT analysis can get you thinking about new strategic directions, address fundamental structural issues in your business and move forward toward new initiatives.
Difficulty: Moderate
Instructions

   1. Gather information from various departments on company strengths and weaknesses, if the SWOT analysis is for an entire organization. If the analysis is for a single department, solicit information from all members of the department--everyone has valuable insights to share. Many quickly-made SWOT analyses are based solely on the creator's interpretation and understanding of a business situation, rather than on multiple perspectives, so incorporating interdisciplinary perspectives will greatly enhance the value of the analysis.
   2. Develop the Strengths and Weaknesses sections first, since they form part of the basis for analyzing the potential impact of the opportunities and threats. Focus on the top three to eight strengths and weakness of the organization or department. Provide details on each strength and weakness. Rather than simply list all the strengths and weaknesses you can think of, without details, as in a basic SWOT analysis, provide insight into how each originated. For a truly effective analysis, suggest ways to enhance strengths and minimize weaknesses.
   3. Gather information on overall industry and economic conditions to gain insight into both Opportunities and Threats. Don't analyze only your industry, but also look at allied industries, and the economy as a whole, to make your SWOT analysis better. Look at factors such outsourcing, the growth of the industry, potential new technologies and all other changes you foresee, even if you are not sure if they are a threat or an opportunity. It is quite possible for some factors in your industry to be both. You will analyze the potential impact of all changes in the light of your strengths and weaknesses.
   4. Identify your top competitors. Analyze those organizations, looking at their product lines, market share and other factors that will help you identify how much of a competitive threat they are.
   5.   Determine which changes and developments in your industry are threats, and which are opportunities. Don't hesitate to identify a development as potentially both, highlighting which contingencies could make a new factor a threat, and which contingencies would make it an opportunity--something that will add greater depth the the analysis. Identify three to eight threats and opportunities. To enhance the value of the SWOT analysis, offer possible responses to all threats, and ways of taking advantage of all opportunities.

Investment and SWOT Analysis

SWOT analysis is a strategic planning method devised in order to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a project, company or business venture. When it comes to investors, they are concerned with the returns on their investments. SWOT analysis is used to show potential investors the value of the venture and thus their investment.

      Definition
   1. SWOT analyzes Strengths, Weaknesses, Opportunities and Threats to help investors make better business decisions. This study contains vital information to appeal to, and even dissuade, potential investors from a specific project or business venture. SWOT analysis was devised by Albert Humphrey who, while working at the Stanford Research Institute, produced a method for planning, then called SOFT analysis (Satisfactory, Opportunity, Fault and Threat). This was further developed into what we know today as SWOT analysis.
      Features
   2. The following are the components and the various corresponding factors taken into account during a SWOT analysis. When looking at strengths, relative size of the industry, balance sheet strength, cash flows, brand/product perception and areas of expertise are the relevant factors. In weaknesses, factors such as a negative balance sheet, poor public perception, problems in management and competitors' advantages must be considered. Factors such as growth prospects, technological advancements and potential investments are relevant for the opportunities component whereas internal problems, financial constraints, cash flow issues, relative position of the company in industry and threatening technological advancements are significant components in the threats category.
      Significance
   3. SWOT analysis is a key component of effective strategic planning. It subjectively evaluates the impact of internal and external factors in achieving a business objective. The internal processes of a company are considered as its strengths and weaknesses while the external factors affecting the business of a company are considered opportunities and threats. Through SWOT analysis, one hopes to develop a strategic perspective about the standing of a particular project in the industry landscape.
      Considerations
   4. A SWOT analysis is always subjective and concise; thus, it has limited value in ensuring investors that they are making strategically sound and precise business decisions. Efforts should be made to make the analysis as detailed as possible regarding the internal status of the business and the future growth one may expect in the future.
      Misconceptions
   5. It is not advisable for investors to solely base their decision on a SWOT analysis. The agenda of a SWOT analysis is to prepare a snapshot of the current situation of the company as well as its future prospects. An effectively pursued SWOT analysis can provide companies invaluable insight into their industry, helping them to understand the tactics they need to employ to gain a competitive advantage. Once pursued, a SWOT analysis should be regularly revisited to evaluate the impact of current strategies in a technologically fast-paced economy.

Retailer SWOT Analysis

A SWOT analysis evaluates a business's Strengths, Weaknesses, Opportunities and Threats. Although a SWOT analysis could be ordered regarding a retailer as a whole, a retailer could also commission a SWOT analysis to address the potential gains and losses involved with launching a new clothing line, opening new branches or even changing distribution methods. SWOT analyses have many applications in addition to these.

      Strengths
   1. When generating the strengths portion of the SWOT analysis, address and list the internal components that give your business a competitive edge or are its high-performing areas. For example, this section would list a large customer base, high brand recognition, a durable product line, an efficient distribution chain, low staff turnover and low overhead. These examples could apply to any retailer, but they would only appear in the strengths section because they are positive attributes about the internal business environment.
      Weaknesses
   2. When generating the weaknesses portion of the SWOT analysis, address and list the internal components that are performing at a sub-par level or are simply hindering your business from performing better. For example, this section might list poor customer service, long waiting lines, a small amount of inventory, faulty product lines and low staff morale. These examples could apply to any retailer, but they would only appear in the weaknesses section because they are negative attributes about the internal business environment.
      Opportunities
   3. When generating the opportunities portion of the SWOT analysis, list the external features that would provide your business an opportunity to grow or expand. For example, this section might list less strict international labor laws, a decrease in the price of raw materials, fewer competitors, local population growth or a growing economy. These examples could apply to any retailer, but they would only appear in the opportunities section because they are features in the external business environment that the retailer could take advantage of.
      Threats
   4. When generating the threats portion of the SWOT analysis, list the external features that could possibly harm the growth or current status of your business. For example, this section might list a declining early-adopter customer base, more competitors entering the marketplace, rising business tax rates, manufacturers discontinuing product lines or shrinking of overall demand. These examples could apply to any retailer, but they would only appear in the threats section because they are features or elements in the external business environment that the retailer may struggle to adapt to or struggle to compete against.
      How to build the SWOT Analysis
   5. A SWOT analysis should be formatted to fit in a two-by-two chart where the strengths and weaknesses are listed in the top two boxes and the opportunities and threats are listed in the bottom two boxes. Make sure the strengths and opportunities are placed in the left two boxes and the weaknesses and threats are in the right two boxes.

Student SWOT Analysis

A SWOT diagram is a simple matrix that illustrates strengths, weaknesses, opportunities and threats. Creating SWOT analysis charts with students can be an exploration, a chance to inspire learning and to capitalize on students' natural abilities. In the context of educational goals, students and teachers should work together to compile characteristics within the grid. That will keep students focused on solutions, turning what might be perceived as a negative into a positive.

      History
   1. The origins of SWOT analysis are unclear, but multiple reports give credit to professors at Harvard and Stanford universities, anywhere from the 1920s to the 1960s, as they studied groups of executives and their ability to effect change within their companies. The use of this assessment tool as it relates to students encourages them to take control of their educational goals.
      Significance
   2. A student SWOT assessment diagram is a subjective approach to problem solving, project planning and reviewing education from all angles. It is a strategy formation modified to specifically relate to students, helping teachers evaluate students' skills. Utilizing a SWOT model also creates realistic expectations between students and their teachers.
      Function
   3. The diagram itself illustrates academic achievement and points out where more work is required. The analysis breaks down students' characteristics into the four categories: strengths, weaknesses, opportunities and threats. It is a brainstorming tool that allows for a strategic look at problem solving and attempts to maximize solutions, whether focused on a short-term project for a particular class or on long-term goals such as getting a high grade or attending a particular college. Strengths and weaknesses are internal forces, whereas opportunities and threats are external.
      Features
   4. A student SWOT analysis determines where students rank academically versus where they perceive they are, and puts strong focus on where they could be if they address the weaknesses and threats that keep them from reaching their goals. It is a powerful tool for opening discussion, setting specific targets and inspiring critical thought. It also facilitates teachers attempting to identify their students' individual learning styles.
      Benefits
   5. By creating a SWOT diagram, students are able to take control of their educational goals and adjust their actions to make more progress. The visual aspect of the model (in matrix or grid form) raises students' self-awareness, creates a dialogue between students and teachers and provides a method by which teachers can gain feedback on their methods. By outlining and defining students' educational assets, teachers can adapt their styles and lesson plans, and capitalize on new learning opportunities, which will likely result in academic success and fulfillment for both student and teacher.

The Usefulness of the SWOT Analysis

# Businesses use SWOT analyses as strategic tools to evaluate their strengths, weaknesses, opportunities and threats. In conjunction with the company's mission, SWOT analyses assist businesses in discovering new strategies to achieve their objectives. These tools help decision-makers see the bigger picture in relation to their business's internal and external environments. SWOT analyses are instrumental in helping companies realize growth and sustain profitability.
Decision-Making
# The Manager's Electronic Resource Center explains that businesses use SWOT analyses for decision-making. When companies are faced with strategic questions about their business, a SWOT analysis can to help them gather and evaluate key information. According to the University of Kent, a SWOT analysis provides strategists with an overview of the company's strengths, weaknesses, opportunities and threats, which helps decision-makers select the best routes for their business. A SWOT analysis can help businesses discover new strategies and take advantage of untapped opportunities.
Understanding Competition
# According to Harvard Business School, it's essential for companies to identify and understand their main competitors. SWOT analyses help companies evaluate their external threats--including competing businesses--to determine whether special action needs to be taken. By studying competition, companies can make adjustments to their own strategies in effort to win a price war or gain other advantages over competitors.
Positive Recognition
# SWOT analyses point out a company's strengths. Sometimes, the good news gets lost amid the hustle and bustle of everyday business life. According to Ecofine, by conducting SWOT analyses, companies get to see where they excel and what they do well.
Positioning
# Since SWOT analyses provide insight into a company's internal and external environments, businesses can use them to determine positioning strategies. When it comes to marketing, a SWOT analysis will inform a company of any potential threats, as well as existing or upcoming opportunities. This information can help a company decide how it should, and should not, position itself in the market.