How to Implement a SWOT Analysis

A SWOT analysis forces managers to look at corporate strengths and weaknesses.

A SWOT analysis forces management to be honest and look at all of the strengths and weaknesses of their business, as well as opportunities and threats. The more thorough the SWOT analysis, the better your company can be positioned for long-term survival. The weaker the SWOT analysis, the more likely a company can be upended by changing trends or threats. A poor SWOT analysis could also lead to a company failing because it did not work to improve in weak areas.

Instructions

1. Look at the strengths of your company and what your company is doing right. You may have invested in cutting edge technology that has paid off handsomely for your company, or your sales team may have the highest numbers in the region. Maybe your company took a stand on a tough ethical position that increased the public's awareness of your company.

2. Examine the weaknesses of your company. Don't be afraid to be critical of your business and how you are operating. Maybe your business does not have enough managers, or maybe it has too many. Your company may have taken on debt in order to expand its operations, and now that debt is becoming a burden. Maybe your company has been using the same computer system for the last 30 years, and it's now starting to impact your business negatively.

3. Look for opportunities that your company can potentially capitalize on. You may be an Internet security company, and smartphone technology has opened up a new market that you've yet to exploit. Perhaps you operate a publishing company, and you feel now is the time to look at publishing interactive books. Perhaps a new piece of software has been released that can streamline the work your sales force does.

4. Review what competing companies are doing and gauge what threats they pose to your business. Also, look at how trends are changing, the impact they have on buyer tendencies, and whether or not they are impacting your bottom line. Be honest with yourself. Maybe technology and trends aren't changing, but there are more companies offering services similar to those offered by your company. Maybe the government is considering passage of legislation that will negatively affect your business. Take into account anything that could pose a threat to your business.

References

• Plan Online: Conducting a SWOT
• Overseas Development Institute: SWOT Analysis
• Canadien Investor Relations Institute: S.W.O.T. Analysis (PDF)
• Red Cross: User's Guide for SWOT Analysis (PDF)