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Adapted from "S-O-F-T Analysis", by
Blue Rock Capital
"Problem-solving" is not planning
"Planning" is not the same as "problem-solving"
Effective planning can not be done without
addressing the problems that are critical.
Not all
problems deserve attention. Some just go
away.
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SWOT Analysis is the Key
Component of Strategic Development.
It can prompt actions and responses |
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Internal |
External |
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Build on strengths |
Exploit
opportunities |
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Revolve weaknesses |
Avoid threats |
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Successful businesses build on their
strengths, correct their weaknesses and protect against
internal vulnerabilities and external threats. They also keep an eye on
their overall business environment and spot and
exploit new opportunities
faster than competitors. Strengths, Weaknesses, Opportunities and Threats (SWOT)
analysis is a tool that helps many businesses in this process. |
"SWOT"
is an acronym which represents "Strengths", "Weaknesses", "Opportunities", and
"Threats". To undertake a SWOT analysis, ideally, the first step is to make a
long list of every factor that defines the company's situation. If you have a
detailed one-sentence description of the company, this is a great place to
start. If the company already has a
business plan, page through and start "circling" the various factors that
are descriptors of the company and its situation.
The next
move is to triage this long list in order to sort the entries into legitimate
"planning issues" (List A) and true "problems" (List B).
Take List
B and determine which of the "problems" are likely to "just go away". Put the
issues that are likely "just to go away" off to the side and focus on List A
(true "planning" issues) plus the balance of list B (problems that
are not likely just to go away).
Then
assign the issues to the specific categories of the SWOT analysis - which ones
are "Strengths", which ones are "Weaknesses", which ones are "Opportunities",
and which ones are "Threats?"
Note
that a company's "Strengths" and its "Weaknesses" (its "flaws") are obviously
internal considerations. In "Strengths", list your company's internal
strengths that make it competitive in the marketplace. In "Weaknesses", list any
weaknesses along the
value chain
of
your venture that must be strengthened to ensure success.
Note that a company's "Opportunities" and
"Threats" in a company's operating environment are clearly external
considerations. In "Opportunities", list the opportunities in the market your
venture is going to capitalize on. In "Threats", list the external threats that
your venture must be aware of problems that it has to solve.
Equally
obvious is the fact that "Strengths" and "Opportunities" are both positive
considerations. "Weaknesses" and "Threats" are both negative considerations. To
express these relationships, it can be helpful to think of these factors in a 2 × 2 matrix (see below).
In
order to do effective strategic planning, there are specific ways that this
information can be used by the company. In general, it is clear that the company
should attempt
Using the
matrix below, try this exercise for your company.
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Strengths:
potentially positive
internal factors |
Weaknesses:
potentially negative
internal factors |
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Opportunities:
potentially positive
external factors |
Threats:
potentially negative
external factors |
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 SWOT Analysis:
Questions To Answer
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What is your strongest business asset?
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What do you offer that makes you stand out
from the rest?
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Do you have any specific marketing
expertise?
Leadership and Management
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As soon as you join/start a
company, make a list of strengths and weaknesses of yourself and your
company.
>>> |
Steve Jobs
Apple |
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