S.W.O.T.

ANALYSIS

History of SWOT

Background stemmed from the need to find out why corporate planning failed

Research was funded by fortune 500 companies to find out what could be done about the failure

Research team headed by Stanford Research Institute 1960-1970

Result-corporate planning in the shape of long range planning was not working, did not pay off, and was an expensive investment in futility

What was the problem

Missing link was how to get the management team to agree and commit to a comprehensive set of action programs

1100 organizations were interviewed and a 250-item questionnaire was designed and completed by over 5,000 executives

Seven key findings lead to the conclusion

7 Key Findings

1. Values2. Appraise3. Motivation4. Search5. Select6. Program7. Act 8. Monitor and repeat step 1,2 and 3

Could not change Values so…..

Started with the first step by asking…. What is good and bad about the operation? What is good and bad about the present?

What is good in the present is Satisfactory What is bad in the present is a Fault

What is good and bad about the future? What is good in the future is Opportunity What is bad in the future is a Threat

SOFT became SWOT

What is it?

A SWOT analysis measures a business unit, a proposition or idea

Subjective assessment of data which is organized by the SWOT format Logical order which helps understanding,

presentation, discussion and decision-making

Its strategic planning

Strategic planning is just management speaking for long term future planning

Strategic planning concerns anything that will bring results in anything from 1 to 5 years.

Good management practices to raise your head above the daily grind and take action to positively affect your future

What can it assess? A company (its position in the market, commercial

viability,etc.) A method of sales distribution A product or brand A business idea A strategic option, such as entering a new market or

launching a new product A opportunity to make an acquisition A potential partnership Changing a supplier Outsourcing a service, activity or resource An investment opportunity

SWOT

Strengths (maintain, build and leverage) Weakness (priorities and optimize) Opportunities (remedy or exit) Threats (counter)

Identifying actions

It all depends on your reason and aims for using SWOT

Your ability to manage others Can concentrate on a department rather than

a whole business Can reflect the functional parts of a

department

How to Do a SWOT Analysis

Strength

GOOD NOW

Maintain, build, leverage

Weakness

BAD NOW

Remedy, stop

Opportunity

GOOD FUTURE

Priorities, optimize

Threat

BAD FUTURE

Counter

Step 1

In the here and now….. List all strengths that exist now Then in turn, list all weaknesses

that exist now Be realistic but avoid modesty

Step 2

What might be….. List all opportunities that exist in the future Opportunities are potential future strengths Then in turn, list all threats that exist in the future Threats are potential future weaknesses

Step 3

Plan of action…. Review your SWOT matrix with a view to

creating an action plan to address each of the four areas

Example (small internet business who employ mostly contractors)

StrengthsLow salary and benefits overheadQuick to respond to market changesNo hierarchy means quick decision making

WeaknessExisting workload to greatProject planning non-existentMissing expertise in some areas

OpportunityNeed to increase market shareCould convert existing products for new market

ThreatContractors have little loyaltyLarger competitors traditionally get majority market shareCost of technology investment

Example- Action Plan

Strengths- maintain low overheads by changing pay structure to balance basic pay with performance based bonuses

Weakness-implement project planning system and follow it

Opportunities- test new market with one existing product

Threats-include contractors in performance based bonus scheme

Example (professional association)

Strengths:Members value the professional designationWe have lower course fee structure than similar programsWe provide good customer serviceOur instructors are highly-regarded in the professionWe have a small staff and low overhead

Weaknesses:We are slow to make decisions and adapt to changes that affect the professionThe professional designation is rarely included as a condition of employmentWe are overly dependent on key volunteers who developed and teach our certification coursesWe do not have the resource s to research the market and promote the designation

Opportunities:The employment market for our members is expanding rapidlyThe government has indicated a willingness to review our ActThere is significant interest in accessing our programs from Asia

Threats:On-line education technology will produce more competition for coursesSince NAFTA, interest in the American certification is growingA private company with a successful web site and conference is taking advertisers and sponsors away form us

Action Plan

Based on the SWOT Analysis, the association is better positioned to take appropriate and effective action

( What is wrong with this action plan?)

Strength Questions

What do we do exceptionally well? What advantages do we have? What valuable assets and resources do we

have/ What do members/customers identify as our

strengths?

Tips

Be realistic….and honest Think in terms of what you have that your

competitors don’t have Don’t just take the internal staff and

volunteer perspective…consider how your members and customers view your organization

Weakness Questions

What could we do better? What are we criticized for or receive

complaints about? Where are we vulnerable?

Tips

Don’t tiptoe around weaknesses, but be constructive and positive in putting them on the table

Get research so you know what outsiders think….about you and your competition

Opportunity Questions

What opportunities do we know about, but have no been able to address?

Are there emerging trends on which we can capitalize?

Tips

Look at changes in the sector represented by the organization, technological changes, government policy, socioeconomic and demographic changes

Be open-minded…key opportunities may come from unlikely and seemingly unrelated sources

Consider how you can exploit your strengths or address your weaknesses to generate additional opportunities

Threat Questions

Are any of our weaknesses likely to make us critically vulnerable?

What external roadblocks exist that clock our progress? Are our competitors or quasi-competitors doing anything

different? Is there significant changes coming in our members’

sector? Is technology dramatically changing the sector and

services to it? Are economic conditions affecting our financial viability

Tips

Have an open and expansive perspective The buggy whip manufacturing association

may not have seen early automobiles as a big threat to the association…but they were!

An environmental scan is critical

Final Thoughts

The process is important not only for identifying where to apply resources and attention, it enables the organization to put issues into perspective

If the organization has a major competitor, it can also be illuminating to conduct a SWOT analysis of the competitor

The process can assist in identifying strategies to counter the competition

To anticipate the competitions future moves