You and your team can use SWOT, a strategic planning method, to reach a favorable desired outcome.
SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a well-known strategic planning method that can help analyze the value of a project or business venture. SWOT is best carried out by a team of people — a manager, an accountant, a salesperson, for example.
SWOT analysis is more effective if you first determine a specific objective. Your objective might be to increase sales of your new widget, at a strategically lower price, to account for 10% of your gross this year. Once you have an objective, assess your strengths, weaknesses, opportunities, and threats as they relate to that objective.
Begin by determining and listing your Strengths: the attributes of your company that will be helpful in achieving your objective, and your Weaknesses: those harmful factors that may prevent you from achieving your objective. When thinking of your strengths and weaknesses, think of the 5Ps (product, price, place, promotion, positioning) as well as personnel, finances, customer base, manufacturing, technology, infrastructure, etc. Your strengths might be an ace salesperson, a quality product, and a solid infrastructure to deliver. Weaknesses may be a small advertising budget, weak marketing plan, and no marketing staff.
Next, factor in external conditions; include technological changes, legislation, economic factors, social factors, the marketplace, and your competition. Your opportunities may be that one competitor has closed shop, a second competitor sells higher priced widgets and the marketplace is looking for a lower priced widget. Threats may be that overall widget sales are down, your competitor has a widget with added benefits, and there’s talk of adding a widget tax.
SWOT analysis can help determine the steps you’ll take to achieve your goal. It can also help you to determine whether a goal is attainable. Once you have your list and your analysis shows you have an attainable goal, you and your SWOT team can ask questions. How can we use and exploit our Strengths? Can we mitigate our Weaknesses? How can we benefit from Opportunities? How will we cope with Threats? How do our Strengths match up to our Opportunities? Can we convert our Weaknesses and Threats into Strengths and Opportunities?
SWOT is a great tool to analyze your most pressing business objective, and you can adapt it to assess other aspects of your business— such as analysis of each of your competitors as part of your marketing study.
NOTE: Every tool has a weakness. Don’t fall into the trap of compiling lists that may not be crucial to achieving your objective or desired outcome. Be critical and honest when seeking to convert Weaknesses and Threats into Strengths and Opportunities. Don’t try to use weak Opportunities to offset strong Threats.