SWOT: The Little Black Dress of Business
A SWOT analysis isn’t sexy but it is as basic to marketing planning as the Little Black Dress is to fashion. Elegantly simple, and accessible to all, the SWOT can help us overcome our flaws and leverage our best attributes.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis (“SWOT”) originated from research conducted at Stanford University back in the 1960′s (the same time, by the way, the Little Black Dress (“LBD”) asserted its presence in Breakfast at Tiffany’s). SWOT is a simple, yet effective assessment tool used to help organizations understand the business environment and assist in decision making. It essentially tells you what is good and bad about a marketing proposition.
STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS
Strengths and weaknesses are elements internal to your organization and within your control. These include your
organization’s culture and image, structure, staffing, operational efficiency and capacity, brand awareness, financial resources, and myriad other things. Your strengths are those activities in which you excel and have the most passion. Your weaknesses are those areas in which you are vulnerable, less than adequate, or ineffective compared to the competition.
Opportunities and threats are forces external to your organization and beyond your control. On a macro level, these include political, economic, social, and technological influences. On a micro level, these include the competitive influences and interrelationships within your organization’s particular industry. Opportunities can present themselves in the form of favorable, current environmental trends, your organization’s strengths, or your competitors’ weaknesses. Threats present themselves as macro and micro trends working against you.
There are three components to achieving a successful SWOT analysis: (1) completing an internal and external situation analysis (2) committing the information to a visual SWOT matrix, and (3) synthesizing and analyzing the information.
(1) Internal and External Situation Analysis
It’s important to involve input from as many stakeholders as possible, including employees, clients, and vendors. You may choose to informally solicit input or to use formal methods such as surveys, focus groups, and social media monitoring techniques. You’ll note from my previous blog that I’m a proponent of spending a few extra dollars on research, but there are certainly some low cost methods that can add value. Just remember that you’re not looking for polite, cocktail party comments; you want brutal honesty. It’s the type of honesty you expect
from your trusted friends when you ask if your LBD is flattering or not. You need to know the truth and make adjustments before it’s too late and you miss a great event.
(2) The Matrix
The beauty of SWOT lies in its simple categorization of information into columns of helpful and harmful forces. Presented as a two by two matrix, strengths and weaknesses are captured on the top row quadrants and opportunities and threats below.
You will need to schedule time for a focused and brutally honest SWOT session that includes as many stakeholders as possible. Typically my clients conduct this during a retreat or off-site planning session.
Many of the most insightful moments come when these sessions allow for diversity among participants and a collaborative and inclusive environment.
(3) Synthesizing and Analyzing
Once all relevant data is captured, it is time to synthesize and analyze how the interrelated forces can help or hinder your success. A crucial component of this process is weighing the importance of each internal and external factor. A dozen strengths and opportunities might not outweigh one threat if that threat proves to be
This is the time for complete honesty in assessing and brainstorming how strengths can be used to take advantage of opportunities – or minimize potential harm – and how weaknesses can be minimized or eliminated. Which strengths have proven to be the most important in the past? How can the organization maintain and build upon its strengths to create leverage in the market? What steps need to be taken to help a team admit its weaknesses, repair what it can, and mitigate what it cannot? From what opportunities are the best returns from resources available?
Time and again I have seen this process help clients uncover hidden opportunities or threats that may otherwise have gone undetected. It has also served to confirm what they have intuitively known and provided the basis to develop “what if” scenarios that address potential changes.
WHAT’S IN YOUR CLOSET?
Like the LBD is to fashion, SWOT continues to be a classic component to any marketer’s planning wardrobe. Elegantly simple, and accessible to all, the SWOT can help your organization overcome its weaknesses and rely on its best attributes to stand out in the marketplace. As a strategist for the past 20 years, I have seen SWOT work for organizations of all shapes and sizes. It is a powerful business tool that never goes out of style and is an investment worth making.