How to Use SWOT
A SWOT analysis is a common brainstorming and strategy development tool used in business management. SWOT stands for strengths, weaknesses, opportunities and threats, each of which are of great significance to a start up or an existing business. SWOT is a useful tool for easily conceptualizing and visualizing various aspects of a business.
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Instructions
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Create a four box matrix, with one box representing one of each of the categories of the SWOT analysis--strengths, weaknesses, opportunities and threats.
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Hold a brainstorming meeting with other strategic planners and spend 10 to 15 minutes coming up with ideas to put in each category.
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Observe the results of the brainstorming and write two or three things that represent the most important ideas from each category. For example, a good brand name, strong customer relationships, intellectual property rights, and supply chain access are great strengths. If the company is lacking in any of these areas, they could be large weaknesses. Opportunities often include things like new customer niches that can be tapped into, new products and technology, or new beneficial legislation. Threats could be unfavorable technology, such as a close substitute to your product or service, unfavorable regulations or bad publicity.
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Next brainstorm ways to best take advantage or improve each of these important areas. For each strengths, think "How can we make this strength even stronger?" For weaknesses, try to come up with ways to reduce shortcomings, or turn weaknesses into strengths. For opportunities, think of ways that opportunities can be harnessed and turned into strength. Finally, think of ways to eliminate threats, or turn them into opportunities. It is best to tap into people from many different departments, such as legal, finance, human resources and marketing so that the broadest range of considerations is made when brainstorming. Experts from each area will also know how to best implement plans to take advantage of the SWOT results.
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Use the results of the SWOT session to guide strategic decisions in the business. Over time SWOT results will change as the business environment changes, so it can be useful to hold new brainstorming sessions on a regular basis.
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Tips & Warnings
SWOT analysis can be very useful when planning a start up business, but it is likely that different threats, opportunities, and weaknesses will present themselves over time, and possibly that strengths are not as strong as expected. Be optimistic, but realistic.
