SWOT Analysis

There are several tools available that can help with strategic planning in the early stage of a project. During the planning stage you identify, organize and evaluate information on your current state. One of the most useful tools for organizing information is the SWOT analysis.

The SWOT analysis can help you evaluate your organization's current capabilities and conditions, and is essential for converting this information into knowledge. You can then use this knowledge to effectively define objectives and identify risks.

What is SWOT?

SWOT is an acronym for strengths, weaknesses, opportunities, and threats. The following diagram illustrates how the SWOT analysis defines these four factors.

Each factor is defined as either internal or external (row), and either helpful or harmful (column). The definitions of these four factors are:

• Strengths – These are the internal attributes of the organization that can help achieve your objectives. It defines what the organization does well (its core competencies) and how these strengths can be leveraged.
  
  
• Weaknesses – These are the internal attributes of the organization that can impede progression of the plan and prevent achieving your objectives. It identifies problem areas within the organization and defines the processes it struggles with the most. These weaknesses can be mitigated by bringing in specific skill sets from external sources.
  
  
• Opportunities – These are outside conditions that can help you achieve your objectives. Opportunities can include partnerships with other organizations and acquiring needed skill sets from outside sources and consultants.
  
  
• Threats – These are the outside conditions that might impede your ability to achieve your objectives. Threats can include any external factors that the organization does not directly control. For example, poor economic conditions can be viewed as a threat to achieving your objectives.
  

These SWOT factors can help you plan your objectives. It is usually good practice to first define your future state goals (or vision statement) before attempting a SWOT analysis on your current state.

Then, consider your future state objectives when identifying your SWOT factors. A specific SWOT factor is relevant only within the context of a specific objective. For example, a strength for one objective might be a weakness for another objective.

SWOT Analysis Matrix

The following sample matrix can be used to document the strengths, weaknesses, opportunities and threats of your current state. Identify each factor and list it in the appropriate column (replacing the sample text).

Defining the factors is more effective if performed by a team rather than an individual. Although SWOT is a subjective self-assessment, it is extremely important to be as objective as possible and invest considerable effort when defining your SWOT factors. However, you should avoid becoming bogged down by collecting vast amounts of information and compiling extensive lists of factors.

As previously mentioned, you should identify SWOT factors in relationship to the desired outcomes of your vision statement. This will help you decide which factors are pertinent to your future state goals for the specific project.

Also consider the degree of your strengths and weakness versus industry standards to get a realistic view of these factors. You should also consider the size of an opportunity or threat and define its relationship to your strengths and weaknesses.

After listing your organization's strengths, weaknesses, opportunities and threats, the next step is to define your specific objectives using the results of the SWOT analysis. This is accomplished by aligning your future state goals with the results of your current state assessment.

SWOT analysis is a simple tool that is useful in just about any decision-making or strategic development process. Some examples include applying ITIL practices, developing marketing strategies, and proactive crisis management.

As you can see, there are several ways a SWOT analysis can help you achieve your outcomes. For more information on SWOT analysis, see this Wikipedia article.

By Harry Hiles, HBH Technology LLC — 1 Mar 2009

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