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SWOT Analysis – SKCI Business Strategy Tool


SWOT analysis is one of the most popular strategy tools available due to its simplicity and effectiveness. SWOT stands for Strengths, Weaknesses, Opportunities and Threats and is most often used in the early stages of strategy development. One key benefit of this tool is its flexibility as you can use it to spot links between departments which may normally go unnoticed.

When To Use The SWOT Analysis

SWOT is one of the first tools you should use when looking into strategy development. It allows you to assess the current position of your organisation and highlights the areas you may wish to enhance, as well as, the weaknesses that you will want to strengthen. You can use SWOT Analysis to investigate the bigger picture and see it as a building block from which to start your strategy planning.

How To Use The SWOT Analysis

The core purpose if SWOT Analysis is to evaluate your organisation’s current position. Therefore, you need to approach the tool with an honest view of your organisation. Now, fill in the four quadrants, outlining the Strengths, Weaknesses, Opportunities and Threats which currently affect your organisation. At this point you do not need extensive detail or even to prove any of your points, this is just about how you view the organisation.

Once the table is filled in, it is important to analyse the stand-alone items to see if any connections can be found. For example, one of our strengths may be a good starting point to explore an opportunity. Or perhaps you could gain benefit from addressing a weakness? Make sure you think imaginatively about the different connections between the squares and do not let your organisation’s structure prevent you from acknowledging inter-departmental actions. Here are some questions which may spark discussion:

  • Can any points be linked by an underlying cause?
  • Can a strength be used to overcome a threat?
  • Is a weakness preventing the potential of an opportunity?
  • Are there several factors affecting the organisation or one root cause?

Now you should have a list of different actions which you may want to pursue. It is likely you will have several areas to address but do not jump on all of them at once! Instead you need to prioritise your options and make sure that you are addressing the areas that will have the most impact on your organisation. At this point you may want to bring in other tools to help you delve deeper into your strategy development plan. PEST is often paired with SWOT Analysis to provide understanding of the external factors affecting your organisation.

Worked Example

Let’s look at the example of NewTechNow, an imaginary B2B software and hardware company that we have seen in previous examples.

NewTechNow has the potential for a very bright future. However, there are a number of clouds on the horizon, including the perceived weakness of the management team and the health of the CEO. The CEO’s health issues may, of course, be due to them trying to do too much, as is sometimes expected from ‘visionary’ leaders!

ESG is clearly on the radar of NewTechNow and although there are major threats to the supply chain and new legislation coming in, the opportunities are there and just need creative exploration to monetise them. Additionally, the company has a loyal client base which could be utilised to identify and give positive feedback on new sustainable products and services without any reduction on the bottom line.

There is also the question of how best to protect the IP and how to grow rapidly to a point where the company can define the market in which it operates.

In this example we have some obvious links, including:

  • Visionary CEO / Lack of depth in the management team / Concerns about the CEO’s health / CEO decides to step down
  • Disruptive technology backed by unique intellectual property (IP) / Visionary CEO / IP not properly protected / Overtaken by a ‘fast follower’ / Potential for unprotected IP to be copied
  • Visionary CEO / Unstructured sales and marketing / Weak financial controls

Identifying these links is important as this knowledge is often the first step in the process of identifying any underlying changes that need to be made. For NewTechNow we can see that, whilst having a Visionary CEO is one of their greatest strengths, the SWOT analysis highlights that it is also a factor behind many of their weaknesses. With this insight it is possible for the NewTechNow CEO and leadership team to develop strategies to address this and go from strength to strength.

How Does This Fit Into The 5KQ Strategy Framework?

SKCI’s unique 5 Key Question (5KQ) strategy framework gives our clients an effective way of managing strategy development. SWOT Analysis is a useful tool to answer the first of question, ‘Where are we now?’.

Our framework lays out a clear structure so that you can manage your strategy development in an effective way. As you are in the early stages of strategy planning, SWOT Analysis presents a simple way to understand the positive and negative factors at play in your organisation. To successfully plan where your company is going, you must first understand where it is. SWOT analysis highlights underlying issues which often go unnoticed and ultimately puts you in a strong position to start planning your future.

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