When the going gets tough in law enforcement, they bring in their elite unit: the SWAT (Special Weapons and Tactics) team.
But what happens when the going gets tough in your business? You'll need to assess and make changes, which could involve anything from strategy to process improvement to branding, but have no fear – you have your very own SWOT team on call.
Developed by Albert S. Humphrey in the 1960s, a SWOT analysis is a strategic planning technique used to help inform and decide the approach for the future of a business. It is often thought of as a tool reserved for the C-suite, but truth be told, a SWOT analysis is a great way for anyone to help their organization understand different issues occurring both in the present and the future.
What is SWOT Analysis?
SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. Each letter is a vital component of the tool, which are laid out in a square format with four quadrants, called a SWOT matrix. The matrix is usually filled in with bulleted lists from left to right, top to bottom following the order of the word SWOT.
Similar to brainstorming tools like a fishbone diagram or idea map, a SWOT analysis is an incredible tool to help you get valuable insight into different aspects of your organization or department. Furthermore, it is a powerful, yet simple way to highlight the need for change in a business.
Strengths and weaknesses are internal factors within the company’s control. Strengths are usually positive, can be unique qualities and highlight advantages, while Weaknesses are anything negative about the company that could be improved, changed or eliminated. Weaknesses in particular can be challenging to identify as they require both honesty and objectivity.
Opportunities and threats are external factors outside of the company’s control, like new technology or competitors and their actions. Opportunities is a space to think about possibilities or gaps in the industry that could become advantageous to the company. Threats, on the other hand, focus on areas of vulnerability that may be inevitable or uncontrollable, but could possibly be addressed to provide the company with a chance to protect itself.
Now let's take a look at a strategic SWOT for business. In the example below, we’re an owner of a Chinese restaurant, The Fortune Cookie, and we’re trying to figure out our strategy going forward.
As you can see, in a very straightforward and simplistic manner, a SWOT analysis can highlight strategic options for a business to continue growing, while also informing areas of improvement.
Can SWOT Analysis Help with Process Improvement?
Speaking of improvement, I often hear from continuous improvement (CI) champions that their biggest challenge is convincing others around the organization to buy-in. A SWOT analysis can be a powerful way to bridge the gap between stakeholders and a CI department.
Let’s use an example in the healthcare industry to illustrate how a SWOT analysis could work in a continuous improvement scenario. Imagine a CI champion works for a hospital and wants to begin a project with a specific surgery department. This champion is finding difficulty getting buy-in, particularly because the department already implemented lean process improvement years ago. On top of that, this department is unique in that it offers procedures that no other facility in the state offers, making the department very profitable with a favored status by the hospital administrators.
The champion brings together their team and a couple stakeholders to put together the following SWOT analysis:
The SWOT analysis highlighted strategic options for the hospital to expand while underscoring areas for improvement and vigilance.
For strengths and weaknesses, the champion measures things in their control, like time (i.e. length of stay), capacity (i.e. patient throughput), costs and quality (i.e. patient satisfaction with the unit). For weaknesses in particular, they focused on questions like: what are the bottlenecks in the unit? What are the pain points for the patients? What is the unit doing that is contributing to higher costs or not adding value? During this discussion, despite the positive outcomes and high patient satisfaction, they highlighted that the patients are actually staying longer than normal and that employee satisfaction is low, which is potentially leading to high turnover. They also revealed that despite the profitability of the unit, there is increased capacity to drive even more revenues.
The team moves on to opportunities, which in a traditional SWOT would focus on external opportunities. For process improvement, the champion might want to focus on internal opportunities to highlight areas for improvement. In this case, they've suggested that by creating more career opportunities, like certification for the nurses, they could increase employee morale and cut down turnover. Or that by marketing the unit a little more, they could increase capacity.
Last but not least, the team addresses threats. For process improvement, they focus on threats that emerge if the unit does not take action. They think of things like: unhappy doctors and nurses could leave their unit to join another hospital and start a competitive surgical program, or patients could be unaware of the services this unit offers, so they may seek help elsewhere.
One of the things to note in this example is that by getting stakeholders involved in developing the SWOT, they can help illuminate areas of improvement and opportunities you may not see and then can become champions of the process improvement themselves. If they are unable to join in for the development, a SWOT analysis can also be used as a wonderful communication tool to help get the buy-in you need for your stakeholders!
How is SWOT Analysis Used in Marketing?
So far we’ve reviewed an example of SWOT for strategic planning and then process improvement. But can SWOT analysis help in other areas like marketing? Let’s look at a practical use of SWOT for marketing, specifically brand managers.
In this example, a global clothing manufacturer with wide distribution and design skills wants to evaluate its brand.
For strengths, the brand manager evaluates things it can control today, like its high quality and low costs. For weaknesses, the brand manager lists items like their unclear product positioning and a smaller product selection than competitors. For opportunities, the manager cites premium products and for threats, the manager lists knock-off brands as well as aggressive advertising from its competition, among other things. View their complete SWOT analysis below:
As a result of this exercise, the brand manager recognizes that they need to take action to clarify the positioning of products as well as expand their product selection. It also empowers them to have a discussion with their Chief Marketing Officer (CMO) about more investments in advertising to help combat their fear of brand erosion from knockoffs or aggressive competitors.
Start SWOT-ing Away!
The SWOT analysis is truly a useful tool that anyone can use to help brainstorm and identify areas of improvement across an organization, regardless of department or focus.
Making a SWOT analysis is easy with our SWOT template in Minitab Workspace. Our template is easy-to-use with the SWOT matrix laid out and ready to go so you just need to brainstorm and fill the information in when you're ready. Don't forget to add a little extra something to your SWOT using design mode—brand your SWOT with company colors or choose your favorite font. Then export with one-click to Microsoft Office or our other Minitab products. By designing your SWOT in Minitab Workspace, you can also save and update it anytime (you know just in case you have comments from stakeholders).
SWOT Analysis is only one of the 90+ tools included in Minitab Workspace; see the full list here.