SWOT - Strengths, Weaknesses, Opportunities and Threats

SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats - and is one of the commonest analytical tools. The data from SWOT will often lead to the need for a project to deliver the changes.

The SWOT data will need to be documented, investigated, discussed, and agreed.

The strengths and weaknesses normally arise from within an organization, and the opportunities and threats come from external sources. External Factors that might need to be considered are:

• Social
• Technological
• Economic
• Ecological
• Political

These factors are known as STEEP factors.

A SWOT Analysis could be performed for the whole organization, or just a part of it, and could include such diverse aspects as:

• information flows
• current products
• morale
• projects
• staff skills
• customers/clients
• competitors
• legislation (current or changes)

Let's look at a fictional example of a company  manufacturing broad-band related products and services....

STRENGTHS

1. Our new web site is based on a content management system and is currently reaching far more web-based customers
2. We have an established and loyal customer base
3. Our reputation in the market has been growing 10% year on year fro the past 3 years
4. Our Corporate level Business Model is viable and profitable
5. Our Sales Force are well established, enthusiastic, committed to the products, and have excellent selling skills

WEAKNESSES

1. Some of our products have older technology embedded in them
2. Cash flow is restricting our IT research and development budget
3. We are not able to respond to customer and market requests quickly enough at this time - mainly due to the new product development life-cycle
4. Our Product Portfolio contains many unrelated products, and sometimes distracts us from our core business
5. Some product lines have poor and low-profit sales
6. The hiring market is difficult due to our specialist skill needs, and few sufficiently skilled people in the labor market - compounded by the high salaries they command
7. There are many new emerging and related markets, and we have done little research as to what these may be

OPPORTUNITIES

1. There are new areas related to our present product portfolio, and they are ripe for exploration and development
2. Our current customers have shown an interest in related products which we do not yet produce
3. Many of our products could be sold into new industries
4. China is a huge developing market, and a physical presence there could boost sales

THREATS

1. We have been reverse-engineered in the past, and this continues to be a problem - particularly in Eastern Europe
2. New Emission legislation may cause us to withdraw some of our portfolio - possible permanently

Okay. So now what?

An organization would take the Strengths and Opportunities, and then develop strategies to maximise them.

The reverse is true for Weaknesses and Threats - the organization needs to develop strategies to reduce or avoid them.

As a consequence of these strategies a possible project or projects may evolve to implement these changes.