How to use SWOT analysis to plan your business

What to do with the SWOT results

There’s no point carrying out a SWOT analysis if you don’t do anything with it. But what should you do, and how do you make sense of information you’ve gathered? To complete your SWOT haystack, include SWOT analyses produced by other groups or individuals – it always pays to get another point of view. Now sort each category first by relative importance. Then re-sort them in terms of reality – an interesting exercise, which might well require some soul-searching (what evidence do we really have for saying that we are the best?

Finally trim the categories to say no more than five or six items each, eliminating duplicates and homing in on the really critical issues. You can use this as the basis for strategic planning. If you are preparing a business plan, it’s this cut-down summary and the accompanying discussion of strategy that should appear in the document.

The aim of a SWOT analysis is to identify the critical issues in any situation and to organise them in a way that enables you to come up with a sound strategic approach. This should enable you to do the following:

  • build on strengths
  • minimise weaknesses
  • seize opportunities
  • counter threats

Indeed, you might see things in terms of answers to these four questions:

  • How can strengths be used to take advantage of opportunities?
  • How can strengths be used to avoid or defuse threats?
  • How can weaknesses be overcome to take advantage of opportunities?
  • How can weaknesses be overcome to counteract or minimise threats?

But be warned. SWOTs often reflect an existing viewpoint, and the exercise can easily be (mis)used to justify a previously decided position or some already agreed course of action.

And it’s difficult to be objective. You may excel in some aspect of your business. But if there’s no demand for those skills and there’s no opportunity to sell them, your high opinion of yourself might better appear in the SWOT grid as a weakness.

Besides, one person’s threat is another’s opportunity. One individual may regard the recruitment of an experienced part-timer as a threat to existing job roles: another might see the opportunity to learn something from the incomer.

Action not words

Perhaps the greatest danger is the illusion of action. SWOT analyses tend to be stronger on description rather than analysis; you end up with long lists of items with little or no weightings or priorities, and the results can sometimes end up a combination of the obvious and the impossible. SWOT can be a substitute for analytical decision-making.

It’s important to be clear about this. As with most such management analysis exercises, SWOT won’t itself give you any specific answers. But it is a way to organise information and assign probabilities as a basis for developing business strategy and operational plans. As such, it’s relatively quick, clear and comprehensible.

The secret of a good SWOT analysis is to be as open minded as possible to suggestions – particularly in a group SWOT. The first SWOT analysis should be done fairly quickly and talked though. Then it should be followed by another analysis some time to refine some of the points that came up as a result of your fisrt discussion. SWOT won’t help you find a definitive answer to all your questions but it will help you get your thoughts in order so you can concentrate on the main problem rather than on a sea of problems.

The aim of a SWOT analysis is to identify the critical issues in any situation and to organise them in a way that enables you to come up with a sound strategic approach.

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