Lesson 16: Self Assessment - SWOT Analysis

Self-Assessment – SWOT Analysis: Your Strengths, Weaknesses, Opportunities, Challenges

Business Self-Assessment – Your Risk, Threats, Weaknesses, and Challenges

SWOT Analysis

A SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the Opportunities open to you and the Threats you face. Used in a business context, this exercise helps you to carve a sustainable niche in your market. 

Business SWOT Analysis

What makes SWOT powerful is that it can help you uncover opportunities that you are well-placed to exploit. In addition, by understanding the weaknesses of your business, you can manage and eliminate threats before they wreak havoc on your company.

By looking at yourself and your competitors using the SWOT framework, you can start to form a strategy that helps you differentiate yourself from your competitors—so that you can compete successfully in your market.

Tip: Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate to external factors. For this reason, SWOT is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix.

Strengths

• What advantages does your organization have?

• What do you do better than anyone else?

• What unique or lowest-cost resources can you draw upon that others can’t?

• What do people in your market see as your strengths?

• What factors mean that you “get the sale”?

• What is your organization’s Unique Selling Proposition?

Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market. 

If you’re having any difficulty identifying strengths, try writing down a list of your organization’s characteristics. Some of these will hopefully be your strengths. 

When looking at your strengths, think about them in relation to your competitors. For example, if all of your competitors provide high quality products, then a high-quality production process is not a strength in your organization’s market, it’s a necessity.

Weaknesses

• What could you improve?

• What should you avoid?

• What are people in your market likely to see as weaknesses?

• What factors lose you sales?

Again, consider this from an internal and external perspective: do other people seem to perceive weaknesses that you don’t, see? Are your competitors doing any better than you?

Let’s be blunt here — it’s better to be realistic now and face any unpleasant truths as soon as possible.

Opportunities

• What opportunities and potential advantages can you spot?

• What interesting trends are you aware of?

• Useful opportunities can come from such things as:

• Changes in technology and markets on both a broad and narrow scale.

• Changes in government policy related to your field.

• Changes in social patterns, population profiles, lifestyle changes, and so on.

• Local events.

Tip: A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating them.

Threats

• What obstacles do you face?

• What are your competitors doing?

• Are quality standards or specifications for your job, products or services changing?

• Is changing technology threatening your position?

• Do you have debt or cash-flow problems?

• Could any of your weaknesses seriously threaten your business?

Key Points

SWOT Analysis is a simple but useful framework for analysing your organization’s strengths and weaknesses, and the opportunities and threats that you face. It helps you focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you.

It can be used to “kick off” strategy formulation, or in a more sophisticated way as a serious strategy tool. You can also use it to get an understanding of your competitors, which can give you the insight you need to craft a coherent and successful competitive position.

When carrying out your analysis, be realistic and rigorous. Apply it at the right level and supplement it with other option-generation tools where appropriate.

SWOT Analysis Worksheet

Remember: The Questions in the boxes are guidelines. You can just make a bullet point list of your Strengths, Weaknesses, Opportunities, and Threats.

Strengths
What do you do well?
What unique resources can you draw on?
What do others see as your strengths?

Weaknesses
What could you improve?
Where do you have fewer resources than others?
What are others likely to see as weaknesses?

Opportunities
What opportunities are open to you?
What trends could you take advantage of?
How can you turn your strengths into opportunities?

Threats
What threats could harm you?
What is your competition doing?
What threats do your weaknesses expose you to?