Conducting Your SWOT Analysis in Five Simple Steps
Signup to Versational updates and tips to stay informed.
1,361 words; 5 min 26 sec reading time
SWOT: Conducting Your Analysis in Five Simple Steps
What is a SWOT Analysis?
A SWOT Analysis is an exercise all companies will benefit from. This analysis not only tells you where you are but also advises where you should go next. A SWOT uses a simple framework to evaluate your company, current and untapped markets, your competition, and potential issues you might face.
Whether you're entering a new market or pivoting in an existing one, the market and your position in it is always changing. To outperform your competition and improve your offerings, SWOT analysis are essential.
Breaking it down: SWOT
By methodically going through each of these sections a SWOT allows your company to take a good, honest look in the mirror. What do you see? Where are you strong, and where do you need work? What are the emerging market opportunities you should seize? Where is your competition outperforming you, and what might be the obstacles that loom in the future? This analysis is essential because it removes your biases and allows you to focus on what lies ahead.
The Four Steps of SWOT Analysis
In the following sections, we will outline each step of the SWOT process. To begin, you'll need to decipher your area of focus. Will you evaluate your company as a whole? A particular offering? A potential pivot you'd like to take in the market? SWOTs can be performed on your current offerings or on ideas you want to validate. Next, you'll need to choose your brainstorming mode of choice. Anything from a word processing program to the simplicity of a pen and paper is a great way to organize your ideas.
Here's an example of a SWOT template we created:
Step 1: Strengths
Start by asking yourself, "what do you do well." Think about your:
- Disposable Capital
- Individuating Factors of your Competition
Perhaps your offerings are widely applicable to the general public or your team works exceptionally well at handing off warm leads from Marketing to Sales. Maybe your company has a stellar reputation or strong industry network. You could have enviable patents in place or new technology which puts you ahead of the competition. Write down everything that makes your company run smoothly and sets you apart from the crowd.
Step 2: Weaknesses
Next, you'll evaluate what needs work. Remember, this is an exercise that is supposed to help. Don't be afraid to be critical. You can only turn the negative into a positive if you're honest about where your weaknesses lie. Weaknesses are anything that hinders productivity, innovation, or value. Consider again:
- Disposable Capital
- Individuating Factors of your Competition
It may be that your offerings are limited compared to your competitors or that your team lacks education or cohesion. Perhaps you're new to the market, and your network is small. Maybe you are in between rounds of funding or are experiencing a low margin year. You might need to invest in better technology or apply for further merits (such as backing from regulating offices or accreditations). Write down everything that hinders your company's ability to compete.
Step 3: Opportunities
Opportunities exist anywhere you observe or discover an opening or a need for your offering. For this step, look at all applicable markets (not just your current markets) from a bird's eye view.
- What do you see happening now?
- What are the trends for the future?
- How are you currently positioned?
- What new opportunities exist?
- Is the market expanding?
- Is there a niche you're likely to fulfill?
- Is there an opportunity window you hadn't seen?
Evaluate all aspects of potential markets and your offering's fit without judging or worrying about how you might approach them. Write down any opportunities that exist.
Step 4: Threats
Threats are issues outside of your control. However, by addressing them, you are better prepared to combat these threats. Brainstorm openly and honestly about the challenges you face.
- Who are your current or potential competitors?
- Where do they outperform you?
- Are there negative market indicators or trends that could affect you?
- Will new technology make your product less favorable?
- Is there a consumer shift in behavior, attitude, or spending?
- Is there a block or change in the chain of supply or demand?
Record anything that might hinder your success in your current or future markets and trends that might impede your success.
Putting SWOT into Action
If you're still wondering what exactly a SWOT looks like, look no further. The following is an example from a healthcare analytics vendor:
Let's walk through each section. First, Strengths.
Strengths: The vendor had a deep working knowledge of their product and the market within which it existed, especially when it came to the fairly new approach (and legalities) of Value-Based Care. Their product was easily adaptable to any hospital system, meaning it didn't create extra work or advanced learning to be implemented. Furthermore, the company excelled in customer service, ensuring that any issues that arose would be met thoughtfully and efficiently.
Weaknesses: While the vendor had a beneficial offering, their team wasn't well-versed in demonstrating this. Further, their clinical inexperience brought their financial modeling into question for that particular setting. The team also lacked a concrete sales division. Labor was divided to mean everyone was good at everything in the company, but no one was great at sales.
Opportunities: The opportunities for the vendor were largely due to their one differentiating factor: their expertise in Value-Based Care. Their biggest opportunities relied on this and in staying ahead of the competition by leading the pack with models, scenarios, and analyses for different healthcare episodes related to value-based care. Furthermore, their background in navigating different EHRs (Electronic Health Records) made integrating their solution easier for the consumer, further reducing objections.
Threats: Their market (healthcare) is a crowded one and one that is slow to change. Despite their good showing in integration, the time it would take to get their solution running for each customer was also a deterrent. Further, the highly profitable and ever-changing healthcare field guaranteed that they would find themselves amongst fierce competition.
Step 5: Post SWOT: Now What?
Now that you've identified all of the aspects of your SWOT, it's time to rank them in order of importance. In the example above, we discussed the most important Strengths, Weaknesses, Opportunities, and Threats from each category. Decipher which of your brainstorming answers are most important and rank them accordingly.
Once you've ranked each category, you can use this information to inform your short and long-term strategies. By ranking the Opportunities, you'll know which are the most important to go after now and which you should plan for in the future.
Now that you know your SWOT and have ranked your answers, you can see the interplay between them. How do your Strengths help you to seize Opportunities or sidestep Threats? How might your Strengths help you overcome your Weaknesses? What Weaknesses will you need to strengthen to go after your #1 Opportunity or face your #1 Threat? By systematically going through your SWOT and prioritizing each idea, a roadmap begins to form.
For example, with the vendor discussed above, their Strength in customer service highlighted their Strength as a team. This helped them to address their Weakness in sales and to create a separate Sales Department. This department honed in on a technical sales approach, an approach they'd discovered as an Opportunity. Selling from this vantage point helped to differentiate them from one of their Threats and allowed them to enter the market at a significant pace ahead of their competition.
Throughout the SWOT process, evaluation brings up both positives and negatives. However, as we mentioned earlier, negatives always present room for change, and change is where you find differentiation. Again, this exercise is one that should be done repeatedly throughout your company's existence. Whether for your first launch or your fiftieth pivot, a good SWOT Analysis performed internally perfects your position and prioritizes success.
© 2021 Inteligems, Inc. All Rights Reserved.