Guide SWOT Analysis Guide

SWOT Analysis Guide The comprehensive guide to the SWOT

analysis method

In the following guide we will introduce you to several widely used strategic planning

methods. They enable business executives and strategists to evaluate options, plan

for the strategic goals and implement the changes necessary to achieve those goals.

The evaluation version of the guide

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Business Analysis Methods

Guide

SWOT analysis:

method in the business environment

If you are even remotely familiar with a business world, you have certainly heard about the

competitive environment, strategic planning and business analysis. There are several different

methods currently used in the business world and one of the most popular st

tools is the SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats.

SWOT can be further classified in to internal and external factors. Strength and weaknesses belong

to the internal factors, and the opportunities and strength are classified as external factors.

Why use SWOT analysis you might ask? Well, it is a very usef

planning for the strategic goals, when trying to analyze the environment the company operates in,

and it is a good visual illustration of the challenges company faces. What is unique about SWOT is

that it enables managers and executives to lists the key advantages and disadvantages of the

company and matches them with the external factors that will influence the company’s

performance in the short and the long run.

To give you a better understanding of the method, let’s loo

weaknesses, opportunities and strength.

Strength

• Rights to intellectual property; patents.

• Strong brand.

• High customer satisfaction.

• Cost effective methods in operations.

• Availability of cheap resources.

• Advantage of a highly efficient and effective distribution networks.

Strengths

Opportunities

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SWOT analysis: introduction and use of the

method in the business environment

are even remotely familiar with a business world, you have certainly heard about the


methods currently used in the business world and one of the most popular st




Why use SWOT analysis you might ask? Well, it is a very useful and highly effective tool when



and executives to lists the key advantages and disadvantages of the


performance in the short and the long run.

To give you a better understanding of the method, let’s look at some of the examples of strength,

weaknesses, opportunities and strength.

Rights to intellectual property; patents.

High customer satisfaction.

Cost effective methods in operations.

Availability of cheap resources.

a highly efficient and effective distribution networks.

Strengths Weaknesses

Opportunities Threats

Page 2

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introduction and use of the

method in the business environment are even remotely familiar with a business world, you have certainly heard about the


methods currently used in the business world and one of the most popular strategic evaluation




ul and highly effective tool when



and executives to lists the key advantages and disadvantages of the


k at some of the examples of strength,

a highly efficient and effective distribution networks.

Weaknesses

Threats



Guide

Weaknesses

• No patents.

• Weak or no brand developed.

• Low customers satisfaction.

• High cost structure.

• Expensive natural resources.

• Poor distribution networks.

As you have probably noticed, strength and

is true in a lot of real cases when the strength for one company is a weakness for another. If one

has an access to cheap energy and other company doesn’t, the former has the strength over the

latter.

Opportunities

• Underutilized customer market; there is a room to grow and generate revenue.

• Modern technologies.

• Relaxed regulations.

• Globalization. Since there are fewer barriers, companies may expand.

Threats

• Changing consumer needs and wants.

• Substitute products and new entrants.

• Regulations.

• Trade barriers.

Strengths- Strong brand

- Cheap resources

Opportunities

- Technology

- Low trade barriers


Weak or no brand developed.

Low customers satisfaction.

High cost structure.

Expensive natural resources.

Poor distribution networks.

As you have probably noticed, strength and weaknesses are exactly the opposites of each other. It



SWOT

Underutilized customer market; there is a room to grow and generate revenue.

Modern technologies.

Relaxed regulations.

Globalization. Since there are fewer barriers, companies may expand.

Changing consumer needs and wants.

Substitute products and new entrants.

StrengthsStrong brand

Cheap resources

Weaknesses- High costs

- No patents

Opportunities

Technology

Low trade barriers

Threats- Regulations

-Trade barriers

Page 3


weaknesses are exactly the opposites of each other. It



Underutilized customer market; there is a room to grow and generate revenue.

Globalization. Since there are fewer barriers, companies may expand.

Weaknesses

Threats



Guide

As you can see, the method can be universally used for almost any condition and environment. It

is a tool that can be used in a broader sense and can be as specific as the problem requires

be.

A simple SWOT analysis graphic is shown below for illustrative purposes.

Stakeholders of the SWOT analysis are several. They are: management, employees, suppliers and

distributors, and customers. Let’s not forget that the ultimate goal is to deli

customer satisfaction possible in order to generate revenue and maximize profits. SWOT provides

adequate procedures and guidelines for the management to practice. It states clearly the tactics

and communication patterns management has to im

goals. Employees are directed and trained to increase productivity and reduce errors. Suppliers

and distributors are considered in order to design highly effective and efficient supply chains and

distribution networks; and finally the customer satisfaction and loyalty is one of the most

important aspects that SWOT helps to evaluate and plan for.

Who uses the method? SWOT is used by the managers and top executives in the evaluation,

planning, and implementation proce

In the evaluation process, top executives review the available resources, measure the revenues

and the target cost structures, and once ready, set out a strategic plan that stipulates the direction

that company is going to take. In this process, they

appropriate course of action.

For the planning process, upper and mid level management reviews the graph, and gets familiar

with the key objectives as well as the resources available to them in order to ac

goals. In the implementation process, thanks to the clear definitions of what is going to affect the

company’s performance, employees have the advantage of knowing what to expect and what is

going to challenge them. SWOT helps them anti

order to overcome the barriers.

As you can see, SWOT is an illustrative method of business planning and evaluation. It enables the

management to clearly identify the advantages and disadvantages they are

the realistic goals in order to achieve overall organizational success. Advantage of the method is

that it is versatile, it creates clear visual picture of the situation and can be modified and adjusted

fairly easily. One of the bigg

provides highest results per dollar invested in to the analysis.

Cost efficiency and performance effectiveness is one of the reasons why the method has been

popular among the business executi



is a tool that can be used in a broader sense and can be as specific as the problem requires



distributors, and customers. Let’s not forget that the ultimate goal is to deli



and communication patterns management has to implement in order to achieve the strategic



rks; and finally the customer satisfaction and loyalty is one of the most

important aspects that SWOT helps to evaluate and plan for.


planning, and implementation process.



that company is going to take. In this process, they evaluate all four characteristics and plan for an

appropriate course of action.


with the key objectives as well as the resources available to them in order to ac



going to challenge them. SWOT helps them anticipate the future hurdles and plan appropriately in

order to overcome the barriers.


management to clearly identify the advantages and disadvantages they are



fairly easily. One of the biggest advantages of the method is that it is very inexpensive and

provides highest results per dollar invested in to the analysis.


popular among the business executives sine the 1960s.

Page 4



is a tool that can be used in a broader sense and can be as specific as the problem requires it to



distributors, and customers. Let’s not forget that the ultimate goal is to deliver the highest



plement in order to achieve the strategic



rks; and finally the customer satisfaction and loyalty is one of the most




evaluate all four characteristics and plan for an


with the key objectives as well as the resources available to them in order to achieve the strategic



cipate the future hurdles and plan appropriately in


management to clearly identify the advantages and disadvantages they are faced with, and design



est advantages of the method is that it is very inexpensive and




Guide

SWOT and Balanced

Before we go in to the details of the balanced

analysis, let’s take a look at the BSC (Balanced

how it differs from the SWOT analysis.

BSC is a strategic planning and implementation tool that assists management in the process of

achieving organizational goals. It is a method that enables cooperation and synchronization in the

business procedures. Typically, balan

the subject of interest and the steps that would allow the company to reach highest results in the

listed fields.

A simple version of a basic BSC is illustrated below.

As you can see, there are four fields: financial, internal business procedures, learning and growth

and customers. We will discuss each one of them in little more detail in order to give you a better

understating of how the method works.

Financial; in this section managers list some of the key steps and goals they need to achieve in

order to succeed in their ultimate goal. Steps might be lowering fixed costs, low leverage, possible

IPO etc. As for the internal business process, it might involve training, b

changing organizational structure, etc. For the learning and growth, it might outline the process of

training, growth strategies (acquisition, franchising), and target market share. As far as the


SWOT and Balanced Scorecard

Before we go in to the details of the balanced Scorecard method and compare it to the SWOT

analysis, let’s take a look at the BSC (Balanced Scorecard) and define what it is, what it does and

s from the SWOT analysis.



business procedures. Typically, balanced Scorecard consists of several fields (usually 4), which lists


A simple version of a basic BSC is illustrated below.

Balanced Scorecard



understating of how the method works.

s section managers list some of the key steps and goals they need to achieve in


IPO etc. As for the internal business process, it might involve training, b



Page 5


Scorecard

method and compare it to the SWOT

) and define what it is, what it does and



consists of several fields (usually 4), which lists




s section managers list some of the key steps and goals they need to achieve in


IPO etc. As for the internal business process, it might involve training, better communication,





Guide

customers are concerned, management mig

satisfaction, brand development, and advertising.

What is important to understand is that, there is a difference between the SWOT and BSC. While

the SWOT analysis is mostly used in the broader planning procedu

the organization, BSC is a tool that has often been used in the process of achieving a specific goal.

To make it clear, SWOT is used to define the goal, and the BSC is used to design a plan to achieve

that goal.

BSC is not strictly limited to this particular purpose and can be successfully used in a broader

planning; but we have found that the method is most appropriate and useful when planning for a

particular strategy and steps for implementing it.

While the design presented above is not a standard one, most frequently we encounter 4 field

designs. An alternative design is presented below.

SWOT and BSC have been in use for several decades and have proved to be effective and efficient

methods in business planning.

The two methods have frequently been viewed as competitors, but the consensus has been

emerging in the academic as well as the professional community that the two are more

complementary to each other than they are rivals.

Both methods are relatively cheap to desi

the key aspect that will determine the organization’s success.

In conclusion it has to be mentioned that, BSC and SWOT are two methods that help define goals,

steps, and an overall organizational stra

decades. Even in the modern age of technology and alternative methods, these two simple graphic

charts have been very popular among the top executives.


customers are concerned, management might define the strategy for increasing customer

satisfaction, brand development, and advertising.


the SWOT analysis is mostly used in the broader planning procedures, such as strategic goals for



strictly limited to this particular purpose and can be successfully used in a broader


particular strategy and steps for implementing it.

ted above is not a standard one, most frequently we encounter 4 field

designs. An alternative design is presented below.


methods in business planning.

methods have frequently been viewed as competitors, but the consensus has been


complementary to each other than they are rivals.

Both methods are relatively cheap to design and implement, and provide a valuable insight in to

the key aspect that will determine the organization’s success.


steps, and an overall organizational strategy; they both have been used successfully for several


charts have been very popular among the top executives.

Page 6


ht define the strategy for increasing customer


res, such as strategic goals for



strictly limited to this particular purpose and can be successfully used in a broader


ted above is not a standard one, most frequently we encounter 4 field


methods have frequently been viewed as competitors, but the consensus has been


gn and implement, and provide a valuable insight in to


tegy; they both have been used successfully for several




Guide

More in the full version of

Methods Guide

• 29 page SWOT guide

• Alternative methods to SWOT analysis

• Steps in solving problems using Porter’s Five Forces for Competitive Position

• Solving problems using the SWOT analysis

Result

• SWOT analysis: conclusions

• SWOT FAQ

• SWOT checklist

• 21 PowerPoint templates

presentation

• 32 page PEST Analysis

• Introduction to the method and problem of PEST

• PEST and SWOT

• PEST and its extensions

• Step-by-step guide on how to use PEST for solving business problems

• Key success factors of PEST

• Examples of real-life usage of PEST

• Conclusions

• PEST FAQ

• Checklist for PEST

• Other aspects related to PEST

Review of the most popular business analysis methods

The review includes introduction to the method, step

practices.

• 80/20 Pareto Analysis

• Break-even Analysis

• Competitive Analysis

• Key Ratio Analysis

• PEST Analysis (3 page)

• SWOT Analysis (4 page)

• Variance analysis (4 page)

• "What if..." simulation (4 page)

Learn more online: http://www.measurebusiness.com/


More in the full version of the Business An

Methods Guide:

SWOT guide (Adobe PDF file):

Alternative methods to SWOT analysis

Steps in solving problems using Porter’s Five Forces for Competitive Position

Solving problems using the SWOT analysis - 5 examples in format: Problem, Response with SWOT,

conclusions

templates (.pptx file; check examples below) for SWOT analysis

PEST Analysis Guide (Adobe PDF file)

Introduction to the method and problem of PEST

PEST and its extensions

step guide on how to use PEST for solving business problems

Key success factors of PEST

life usage of PEST

Other aspects related to PEST


The review includes introduction to the method, step-by-step algorithms, pros and cons, best

80/20 Pareto Analysis (4 page)

even Analysis (4 page)

Competitive Analysis (4 page)

(3 page)

(3 page)

(4 page)

(4 page)

"What if..." simulation (4 page)

http://www.measurebusiness.com/

Page 7


Business Analysis

Steps in solving problems using Porter’s Five Forces for Competitive Position

5 examples in format: Problem, Response with SWOT,

(.pptx file; check examples below) for SWOT analysis

step guide on how to use PEST for solving business problems


step algorithms, pros and cons, best

Documents

Guide SWOT Analysis Guide