Tool 193: SWOT Analysis

AKA

Situation Analysis

Classification

Planning/Presenting (PP)

Tool description

The SWOT analysis is an effective tool to define a situation currently faced by an organization. This analysis identifies internal and external environmental characteristics such as organizational strengths, weaknesses, opportunities, and threats. This tool is instrumental in the strategic planning and goal-setting process.

Typical application

• To assess the relevant characteristics within an organization in order to verify its strengths and weaknesses.

• To evaluate organizational health.

• To plan for and position an organization in order to capitalize on future opportunities.

Problem-solving phase

→	Select and define problem or opportunity
→	Identify and analyze causes or potential change
→	Develop and plan possible solutions or change
	Implement and evaluate solution or change
	Measure and report solution or change results
	Recognize and reward team efforts

Typically used by

1	Research/statistics
	Creativity/innovation
	Engineering
3	Project management
	Manufacturing
	Marketing/sales
	Administration/documentation
	Servicing/support
	Customer/quality metrics
2	Change management

links to other tools

before

• Affinity Diagram

• Factor Analysis

• Circles of knowledge

• Critical Dialogue

• Benchmarking

after

• Risk Space Analysis

• Comparison Matrix

• Gap Analysis

• Futures Wheel

• What-If Analysis

Notes and key points

• Strengths - Weaknesses - Opportunities - Threats (SWOT) definitions:

  • Strengths: Organizational resource and capabilities available to meet tactical and strategic business goals.

  • Weaknesses: Organizational deficiencies that may inhibit or limit business goal attainment.

  • Opportunities: A product idea, technological change, favorable trend, or market niche that could greatly improve an organization's position in the marketplace.

  • Threats: Porformance barriers or obstacles, unfavorable business trends, or operational problems that may have an adverse effect on the organization.

Step-by-step procedure

• STEP 1 The team engages a facilitator who has considerable experience in organizational analysis.

• STEP 2 The facilitator explains the SWOT analysis technique to the participants and draws four headings on a whiteboard or flip charts. These are strengths, weaknesses, opportunities, and threats.

• STEP 3 Participants identify items under each heading. The facilitator records them under respective headings. See example Organizational Positioning Using SWOT Analysis.

• STEP 4 Once the team has slowed generating items recorded information is reviewed for appropriateness and completeness.

• STEP 5 The information is dated and presented to the planning team or committee.

Example of tool application

Organizational Positioning Using SWOT Analysis

SWOT Analysis		Date: xx/xx/xx
Team: Improvers	Organization: Alpha Research Group	Contact: W.J.M.
Internal Analysis
Strengths	Weaknesses
Good reputation	Cannot always meet demand
Proprietary materials	Limited resources
Technical expertise	Average marketing skills
On-time delivery	Limited product line
Strong research capability	Frequent prioritizing
Process/product innovations
External Analysis
Opportunities	Threats
Sell tools for teams on internet	Consultants reducing fees
Develop custom tools workshops	Loss of interest in TQM work ethic
Train-the-trainer	"Stealing shamelessly" by others
Diversify into related services	"Retiree" competitors