SWOT Analysis Examples

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SWOT Analysis Overview What is SWOT Analysis?

Remember, It’s Virtually Impossible To Focus Too Much On What You Do Well And What Creates Profits For Your Business.

A SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool used to provide a general or detailed snapshot of a company's health. Think of your SWOT as a tune-up that every business needs periodically to diagnose and fix what’s a bit worn, what’s on the verge of breaking down, or what’s already broken and needs replacement--so that you can keep the business humming—even better than it has in the past.

SWOT offers professional managers an effective evaluative technique to aid the decision making process.

It can not find the solution for you, but it will ensure that issues are: identified, classified and prioritized clearly, showing the problem in terms of key underlying issues. Decision makers can then see the answer.

It's a four-part approach to analyzing a company's overall strategy or the strategy of its business units. All four aspects must be considered to implement a long-range plan of action.


SWOT Example

A start-up small consultancy business might carry out the following SWOT analysis

Strengths:We are able to respond very quickly as we have no red tape, no need for higher management approval, etc. We are able to give really good customer care, as the current small amount of work means we have plenty of time to devote to customers Our lead consultant has strong reputation within the market We can change direction quickly if we find that our marketing is not working We have small overheads, so can offer good value to customers

Weaknesses:Our company has no market presence or reputation We have a small staff with a shallow skills base in many areas We are vulnerable to vital staff being sick, leaving, etc. Our cash flow will be unreliable in the early stages

Opportunities:Our business sector is expanding, with many future opportunities for success Our local council wants to encourage local businesses with work where possible Our competitors may be slow to adopt new technologies

Threats:Will developments in technology change this market beyond our ability to adapt? A small change in focus of a large competitor might wipe out any market position we achieve The consultancy might therefore decide to specialize in rapid response, good value services to local businesses. Marketing would be in selected local publications, to get the greatest possible market presence for a set advertising budget. The consultancy should keep up-to-date with changes in technology where possible.


SWOT Example

Delta Air Lines Inc., chose to invest in a multibillion-dollar customer service system that addresses the flight delay problems experienced by 20% of its passengers. Although some companies might think the move was excessive considering 80% of customers have no problems, Delta believed customer service was an important area for increasing market share and that competitors could pose a threat if Delta didn't address the problem.

Another example is Dell Computer Corp., which is a great example of how an IT company can use a SWOT analysis to carve out a strong business strategy, according to Glazer.

Dell recognized that its strength was selling directly to consumers and keeping its costs lower than those of other hardware vendors.

As for weaknesses, the company acknowledged that it lacked solid dealer relationships. Identifying opportunities was an easier task. Dell looked at the marketplace and saw that customers

increasingly valued convenience and one-stop shopping and that they knew what they wanted to purchase. Dell also saw the Internet as a powerful marketing tool.

On the threats side, Dell realized that competitors like IBM and Compaq Computer Corp. had stronger brand names, which put Dell in a weaker position with dealers.

Dell put together a business strategy that included mass customization and just-in-time manufacturing (letting customers design their own computers and custom-building systems). Dell also stuck with its direct sales plan and offered sales on the Internet.

Clarity in strategy works. Fuzzy strategies fail. Most strategies fail because they don't have a clear direction


SWOT Analysis Strengths

Every organization has some strength. In some cases this is obvious, for example, dominant market shares. In other cases, it is a matter of perspective, for instance, a company is very small and hence has the ability to move fast. It is important to note that companies that are in a bad position also have strengths. Whether these strengths are adequate is an issue for analysis.Define areas you excel in, such as the company’s core competency and resource analysisConsider strengths from your own point of view and from the point of view of the people you deal with. Don't be modest - be realistic. If you are having any difficulty with this, try writing down a list of your characteristics. Some of these will hopefully be strengths!Strengths will include the wisdom and experiences learned by the staff. Some of their skills may be valuable for continuing in the same way, but may be a hindrance to making an organizational or program change.

SWOT will help you to focus on your strengths, minimize weaknesses, and take the greatest possible advantage of

opportunities available


SWOT Analysis Weaknesses

Every organization also has some weakness. In some cases, this is obvious; say for example, a stricter regulatory environment. In other cases, it is a matter of perspective, for example, a company has 99% market share and is open to attack from every new player. It is important to note that companies that are extremely competent in what they do, also have weaknesses. How badly these weaknesses will affect the company is a matter of analysis.

Consider this from an internal and external basis:

Do other people seem to perceive weaknesses that you do not see?

Are your competitors doing any better than you?

It is best to be realistic now, and face any unpleasant truths as soon as possible.

Think of a SWOT as a Cliffs Notes version of deconstructing your business, taking a fresh look, and jumpstarting your company to

steer it a new direction to grow your business


SWOT Analysis Opportunities

All organizations have some opportunities that they can gain from. These could range from diversification to sale of operations. Identifying hidden opportunities is the mark of an astute analyst. Opportunities - Traditionally, a SWOT looks only at the external environment for opportunities. I suggest you look externally for areas your competitors are not fully covering, then go a step further and think how to match these to your internal strengths. Try to uncover areas where your strengths are not being fully utilized. Apart from the kinds of responses desired, the SWOT can be used in other contexts than transformation of a program, and is recommended to be used in annual or bi- annual review meetings. The aim is to provide a non-threatening situation for participants to contribute as freely and without inhibitions as feasible, all the strengths, weaknesses, opportunities and threats that they can recall. If SWOT is based upon verifiable observations of the conditions and attributes that will contribute to success, and is realistic in identifying what may stand in the way of success, then it is more likely to succeed.

SWOT analysis highlights the key issues, and the links between issues, which are related to a problem


SWOT Analysis Threats

No organization is immune to threats. These could be internal, such as falling productivity. Or they could be external, such as lower priced international competitionThreats - As with opportunities, threats in a traditional SWOT analysis are considered an external force. By looking both inside and outside of your company for things that could damage your business, however, you may be better able to see the big picture.In a variation of the method, the facilitator may divide the whole group into smaller groups of four to six individuals, provide them with blank newsprint and markers, and ask them to come up with small group contributions. In this case, the small groups are best chosen randomly. One drawback to this is that some individuals might be reticent at contributing in front of friends, people with whom they work closely, their supervisors or persons they supervise; the advantage is that the total number of contributions is reduced because there is less duplication, and some persons contribute more in a small group discussion than they would alone in front of a piece of paper. Carrying out this analysis will often be illuminating - both in terms of pointing out what needs to be done, and in putting problems into perspective.

It is by understanding the key issues that a solution to a problem can be achieved


About The Author

Steven Bonacorsi is a Senior Master Black Belt instructor and coach. Steven Bonacorsi has trained hundreds of Master Black Belts, Black Belts, Green Belts, and Project Sponsors and Executive Leaders in Lean Six Sigma DMAIC and Design for Lean Six Sigma process improvement methodologies.

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