Skill level: Intermediate
The strengths-weaknesses-opportunities-threats (SWOT) analysis presents a four-way look at an organization. Used in strategy planning, SWOT analysis forces an organization to take a look at itself and its position.
- Allows management to identify areas the organization should pursue, continue, and avoid
- Involves a collaborative approach: team members can participate in brainstorming to acquire a broader perspective of the organization
- Easy to use
How to Use
- Step 1. A common way to set up a SWOT analysis is to draw a box and divide it into four squares.
- Step 2. Label each square with the following headings: Strength, Weakness, Opportunity, Threat.
- Step 3. Brainstorm your internal strengths and weaknesses (factors that are within your direct control), and capture the results in the appropriate boxes.
- Step 4. Brainstorm your external opportunities and threats (outside factors which you cannot control but can respond to), and capture the results in the appropriate boxes.
- Step 5. Analyze the findings to identify areas for improvement, leveraging your strengths and opportunities, while mitigating your weaknesses and threats.
A quality consulting company faced an opportunity to enter a new market with its Six Sigma training. The manager conducted the SWOT analysis shown below to determine if this was a viable course for the company.
From these data, the manager can weigh one factor against another to determine the best course or to develop plans. For example, by leveraging the Black Belts on staff, classroom availability, and the large customer base, this training would be beneficial for the business. However, there are a few weaknesses or threats that would need to be addressed (e.g., obtaining additional Black Belt resources and training equipment).