Are you looking for a SWOT analysis definition? If you are involved in strategic planning for your department or organization, it's certainly important that you understand what is involved in this important step in the planning process. Conducting a SWOT analysis involves indentifying internal strengths and weakness as well as opportunities and threats that may exist in the external environment. This information can be used to help you determine what steps need to be taken to move your organization from where it is today to where it needs to be in the future.
Components of a SWOT Analysis Definition
Conducting a SWOT analysis involves looking closely at four specific factors about your company and the environmental factors that have the potential to impact the organization. The SWOT analysis definition specifies the four variables that need to be evaluated as strengths, weaknesses, opportunities, and threats.
It's advisable to perform a SWOT analysis at least once every year; some organizations actually complete this exercise on a quarterly basis. The process of doing this type of analysis can be just as valuable as the result that you come up with. Involve key players within your organization and encourage brainstorming for information that should be included. The exercise can lead to beneficial insight and can be a valuable team building activity for those who participate.
1. Strengths
A SWOT analysis begins with identifying a company's internal strengths. This is your opportunity to make note of those areas where your organization truly exceeds. Think about areas where your business really excels. Those items are your strengths.While not every company will have the same strengths, a few questions that you may want to ask to get started with the process of coming up with a list of strengths include:
- Does the company have superior products to those of competitors?
- Does the business have an outstanding safety records?
- Is your company's benefits program better than what many competitors offer?
2. Weaknesses
To be useful, a SWOT analysis must also include a thorough review of the areas where the organization is weak. The purpose of this is not to merely point out flaws, but to identify those aspects of the business that may need to be targeted for improvement. Remember that a SWOT analysis will only be beneficial as a strategic planning tool if it is realistic and accurate.
Just as strengths may vary greatly from one company to another, the same is true of weaknesses. You may need to start asking questions to come up with a list of the weaknesses that need to be identified. Questions that you may want to ask when working on this part of your analysis include:
- Is it difficult to find employees with the skills necessary to promote from within?
- Is your company's pay scale lower than that of companies that hire people for similar jobs?
- Does your staff have a high turnover rate?
3. Opportunities
Identifying opportunities requires looking outside of the company to the external environment and making yourself aware of what factors with the potential to benefit the organization may exist.
When seeking to identify opportunities, ask yourself and those around you what changes may have taken place that could have a positive impact on your company. Examples of questions that you may want to ask include:
- Are there fewer competitors in your business category than in the past?
- Has demand increased for the products or services that your company offers?
- Are new resources available for the raw materials you need?
4. Threats
Completing this part of the SWOT analysis requires thinking about the variables in the environment in which your business is operating that pose a threat to the organization's long term success. Questions to ask when identifying potential threats may include:
- Do your target customers have less disposable income than in years past?
- Is your business likely to be impacted negatively by legislative changes?
- Are new competitors entering your market sector?
After the Analysis
Doing a SWOT analysis is beneficial, but acting on what you discover is what really matters. Once you have a comprehensive list of your company's strengths and weaknesses and you have identified the primary opportunities and threats that have the potential to impact the business you need to use that information to plan for the future. Base your decisions about what actions need to be taken in order to move your business from where it is today to where you want it to go in the future on what you learn through conducting a SWOT analysis.
