How to Perform a SWOT Analysis

Summary

Erica Olsen's whiteboard session focuses on creating a SWOT analysis for strategic planning. She explains the importance of differentiating between internal strengths and weaknesses and external opportunities and threats. Olsen advises using data from various sources, including executives, employees, customers, and industry trends, to populate the SWOT matrix. She emphasizes the need for clarity in categorization to ensure the SWOT is effective for planning, highlighting the conversion of weaknesses into operational goals and leveraging strengths for competitive advantage.

Takeaways

• 📈 SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and is used to create a synthesized view of an organization's current state.
• 🔍 Great planning starts with understanding where you are today, and SWOT analysis helps confront the brutal facts to build a better future.
• 🧩 The SWOT matrix is divided into internal (Strengths and Weaknesses) and external (Opportunities and Threats) perspectives.
• 🚫 Tip number one is not to confuse internal and external perspectives; understand what can be directly influenced and what can be influenced but not directly impacted.
• 🤔 To fill out the SWOT, brainstorm with your planning team and use data to support your points.
• 📊 Data sources for SWOT include internal perspectives from executives, employees, and customers, as well as external data like industry trends and competitor analysis.
• 📈 When pulling in data, consider concentric circles starting from megatrends to industry, market, and competitor information.
• 📋 Ensure to include employee and customer perspectives, and industry and competitive information if time is limited.
• 📝 Synthesize the gathered information into 10 to 15 bullet points (BPs) for each quadrant of the SWOT matrix.
• 🔑 Do not confuse Weaknesses with Opportunities; Weaknesses are internal and controllable, while Opportunities are external and influenceable.
• ⚠️ It's crucial to use the SWOT analysis to build out goals and competitive advantages, and not just create it without applying it.

Q & A

What does SWOT stand for and what is its purpose?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Its purpose is to create a synthesized view of an organization's current state, which is essential for strategic, marketing, or operational planning.

What are the four components of a SWOT analysis and how should they be approached?

The four components are Strengths, Weaknesses, Opportunities, and Threats. Strengths should be built upon, Weaknesses should be shored up, Opportunities should be capitalized on, and Threats should be monitored.

Why is it important to differentiate between internal and external perspectives in a SWOT analysis?

Differentiating between internal and external perspectives is crucial for a holistic view of the organization. It helps to clearly identify what can be directly influenced internally and what can be influenced but not directly impacted externally.

How many bullet points are typically recommended for each quadrant in a SWOT analysis?

It is recommended to have about 10 to 15 bullet points in each of the four quadrants of a SWOT analysis.

What are some internal data sources that can be used to inform a SWOT analysis?

Internal data sources include perspectives from executives, board members, partners, vendors, employees, and customers. These can be gathered through one-on-one interviews and by reviewing key performance indicators.

How can external data be categorized when conducting a SWOT analysis?

External data can be categorized into concentric circles starting from megatrends, industry trends, market information, and competitor analysis.

What is the significance of understanding customer perspectives in a SWOT analysis?

Understanding customer perspectives is vital for a SWOT analysis as it provides insights into what the organization is doing well and where improvements are needed, directly impacting the organization's performance and reputation.

Why should Weaknesses and Opportunities not be confused in a SWOT analysis?

Weaknesses and Opportunities should not be confused because Opportunities are about growth and are external factors that can be influenced but not directly controlled, while Weaknesses are internal and directly controllable, often turning into operational and people goals.

What should be the approach if there are more Weaknesses than Threats in a SWOT analysis?

It is common to have more Weaknesses than Threats. If this is the case, it might be helpful to rename the Weaknesses quadrant to 'Areas of Improvement' and ensure all bullet points are phrased as areas needing improvement.

How should the results of a SWOT analysis be utilized in planning?

The results of a SWOT analysis should be synthesized into bullet points and used to build out goals and competitive advantages. Strengths are a source of competitive advantage, Weaknesses turn into operational goals, Opportunities are growth goals, and Threats are monitored.

What is the final tip given in the script regarding the use of a SWOT analysis?

The final tip is to ensure that the SWOT analysis is not just conducted but also utilized in the planning process. It is essential for understanding the current state of the organization and should be used to build goals and competitive advantages.