SWOT Analysis Template © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 2 SWOT Analysis Overview What is SWOT Analysis? Remember, It’s Virtually Impossible To Focus Too Much On What You Do Well And What Creates Profits For Your Business. A SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool used to provide a general or detailed snapshot of a company's health. Think of your SWOT as a tune-up that every business needs periodically to diagnose and fix what’s a bit worn, what’s on the verge of breaking down, or what’s already broken and needs replacement so that you can keep the business humming—even better than it has in the past. 9 SWOT offers professional managers an effective evaluative technique to aid the decision making process. 9 It can not find the solution for you, but it will ensure that issues are: identified, classified and prioritized clearly, showing the problem in terms of key underlying issues. Decision makers can then see the answer. 9 It's a four-part approach to analyzing a company's overall strategy or the strategy of its business units. All four aspects must be considered to implement a long-range plan of action. © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 3 SWOT Example A start-up small consultancy business might carry out the following SWOT analysis Strengths: ¾ We are able to respond very quickly as we have no red tape, no need for higher management approval, etc. ¾ We are able to give really good customer care, as the current small amount of work means we have plenty of time to devote to customers ¾ Our lead consultant has strong reputation within the market ¾ We can change direction quickly if we find that our marketing is not working ¾ We have small overheads, so can offer good value to customers Weaknesses: ¾ Our company has no market presence or reputation ¾ We have a small staff with a shallow skills base in many areas ¾ We are vulnerable to vital staff being sick, leaving, etc. ¾ Our cash flow will be unreliable in the early stages Opportunities: ¾ Our business sector is expanding, with many future opportunities for success ¾ Our local council wants to encourage local businesses with work where possible ¾ Our competitors may be slow to adopt new technologies Threats: ¾ Will developments in technology change this market beyond our ability to adapt? ¾ A small change in focus of a large competitor might wipe out any market position we achieve ¾ The consultancy might therefore decide to specialize in rapid response, good value services to local businesses. Marketing would be in selected local publications, to get the greatest possible market presence for a set advertising budget. The consultancy should keep up-to-date with changes in technology where possible. © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 4 SWOT Analysis How Does SWOT Analysis Work? 9 The strategy is to look at the organizations current performance (strengths and weaknesses) and factors in the external environment (opportunities and threats) that might affect the organizations future. 9 Once the attributes for each section have been identified it is possible to determine the point of balance. Eventually the points of balance of strengths versus weaknesses and opportunities versus threats can be plotted together. 9 For example, an information technology department needs to determine the strengths and weaknesses of its people and its technology. It also needs to make sure the IT strategy complements the company's business goals. The department head needs to ask: What is each staff member good at? What are they not good at? 9 Project leaders also must consider opportunities and threats or customers and competitors. How attractive is the market or direction they're considering? What's their market share and cost structure? POSITIVE NEGATIVE INTERNAL Strengths Weaknesses EXTERNAL Opportunities Threats © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 5 SWOT Example Delta Air Lines Inc., chose to invest in a multibillion-dollar customer service system that addresses the flight delay problems experienced by 20% of its passengers. Although some companies might think the move was excessive considering 80% of customers have no problems, Delta believed customer service was an important area for increasing market share and that competitors could pose a threat if Delta didn't address the problem. Another example is Dell Computer Corp., which is a great example of how an IT company can use a SWOT analysis to carve out a strong business strategy, according to Glazer. Dell recognized that its strength was selling directly to consumers and keeping its costs lower than those of other hardware vendors. As for weaknesses, the company acknowledged that it lacked solid dealer relationships. Identifying opportunities was an easier task. Dell looked at the marketplace and saw that customers increasingly valued convenience and one-stop shopping and that they knew what they wanted to purchase. Dell also saw the Internet as a powerful marketing tool. On the threats side, Dell realized that competitors like IBM and Compaq Computer Corp. had stronger brand names, which put Dell in a weaker position with dealers. Dell put together a business strategy that included mass customization and just-in-time manufacturing (letting customers design their own computers and custom-building systems). Dell also stuck with its direct sales plan and offered sales on the Internet. Clarity in strategy works. Fuzzy strategies fail. Most strategies fail because they don't have a clear direction © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 6 SWOT Analysis Operational Definitions A STRENGTH is something that you truly do well, excel at versus the competition, can build on; something that truly differentiates your business, a key metric that is improving, etc. Most companies do surprisingly bad job of identifying what they are really good at doing. Every company has strengths. A strength can be something very concrete like a large, growing customer base or less measurable: a well-run customer service department that keeps customers satisfied (thus helping both retention and new sales). Note that a STRENGTH can also be a weakness: e.g. you’re Number One in your market is a STRENGTH, but if you are taking that for granted—that’s also a weakness. A Weakness is a real gap, a deficiency, a problem, or a key metric that is going south; something you’re not doing very well and that you should be doing better; something that’s dated that no longer applies—even though it used to; something important that you really don’t know or aren’t sure about. In fact, one good outcome of a SWOT is to discover what you really don’t know and then do something about it. A weakness can be very tangible and concrete or it can be an attitude: e.g. a complete unwillingness to invest in any marketing initiatives or a lack of understanding what to do. The best way to identify STRENGTHS, WEAKNESSES, OPPORTUNITIES & THREATS is to ask the right questions © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 7 SWOT Analysis Operational Definitions (Cont.) An OPPORTUNITY is a favorable external condition; something (that you haven’t acted on or taken advantage yet) that could impact you positively. Opportunities are new ways that your exploit your STRENGTHS, WEAKNESSES & THREATS new things that that you can do to potentially improve your business—that turn into recommendations and actions. This list becomes the most important part of your SWOT for prioritizing and determining what next steps to take. A THREAT is something external to your business that can potentially impact you negatively: competitors (actually doing specific things vs. just being there), changing conditions in your particular marketplace, the overall economy, government regulations, etc. Threats are part of the playing field that you can’t ignore. They are part of the context of your business. Some threats, though, are internal: e.g. hanging onto the status quo when change is required or the impact on remaining if you decide to cut costs (maybe an OPPORTUNITY). You should also make an ongoing list of Issues and questions that inevitably pop-up as a result of developing the STRENGTHS, WEAKNESSES, OPPORTUNITIES & THREATS lists—for further analysis and discussion—and possible incorporation into your SWOT. Generally, STRENGTHS & WEAKNESSES are current in timeframe, and OPPORTUNITIES & THREATS are in the future— starting with tomorrow. The purpose of strategy is to be really clear before you take the direction. The point of a SWOT analysis is to have the best shot at a grounded plan © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 8 SWOT Analysis Template Oppurtunities Threats SWOT Analysis Internal Strengths Weaknesses External Writing alone on a piece of paper, without a name, provides some protection of anonymity, & some observations about sensitive issues can be revealed this way The SWOT Template is a Simple Worksheet © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 9 SWOT Analysis Tips 9 Traditionally, a SWOT confines strengths and weaknesses to your company's internal workings while opportunities and threats refer only to the external environment. 9 Put someone in charge of spearheading it—ideally a knowledgeable consultant (see below) or objective insider who will take the time and be objective. 9 Take one or two weeks, not one or two months—to complete your SWOT. 9 Make big lists, but right-off-the bat start, prioritizing your lists—digitally, so that that they are easy to change and modify (and you may want to take the step of weighting the importance of each STRENGTH, WEAKNESS, OPPORTUNITY & THREAT); keep prioritizing and then weed the lowest priority items at the end. 9 Aim for about five pages: a page for each STRENGTH, WEAKNESS, OPPORTUNITY & THREAT as well as a page for Issues/Questions. 9 Focus on the present and recent past for your STRENGTHS & WEAKNESSES — and not very far into the future for your OPPORTUNITIES & THREATS: 90 to 180 days, maximum. 9 Review your key Marketing & Sales materials like you’ve never seen them before. Get input from at least 3-5 key people who have varying views & opinions © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 10 SWOT Analysis Tricks 9 Minimize the “group grope” and meeting stuff while developing your SWOT — meet to discuss the SWOT, modify it as necessary, and develop one or more action steps. 9 Ask the hard questions and challenge all of your basic assumptions — none are sacred. 9 Be objectively critical but also don’t undersell yourself. 9 Get the key facts but don’t get paralyzed with analysis and fact-finding. You may need to do some other fact-finding and analysis before implementing your recommendations, but don’t get bogged down at the micro-level of detail. 9 Keep “personal” issues off the list — and handle those separately. 9 This is important, especially if there are to be major changes in the organization and the content of the program; all members should feel comfortable that this is a group process, not dominated by factions or individuals. “Its what you learn after you know it all that counts!” - John Wooden . SWOT Analysis Template © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 2 SWOT Analysis Overview What is SWOT Analysis? Remember,. 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 4 SWOT Analysis How Does SWOT Analysis Work? 9 The strategy is to look at the organizations current performance. direction. The point of a SWOT analysis is to have the best shot at a grounded plan © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 8 SWOT Analysis Template Oppurtunities