How to Do a SWOT Analysis: Template & Tips

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How to Do a SWOT Analysis: Template & Tips

December 11, 2018 | Dear CFO | No Comments

Dear CFO,
My company is embarking on its first ever strategic analysis and planning session and I’ve been asked to help the team start with a “SWOT analysis.” I am not sure how to do a SWOT analysis or where to begin.
Needing a first step in Amarillo

A first-time strategic analysis and planning process can be intimidating. It’s hard to start with a blank sheet of paper to stimulate meaningful outcomes. But, as with many business planning processes, there are tricks of the trade to help you get off to a productive start. One of the best strategic analysis tools is a SWOT analysis.

As you probably know, SWOT stands for Strength, Weaknesses, Opportunities, and Threats. Learning how to do a SWOT analysis isn’t challenging, but this simple guide is a powerful tool for visioning and strategic planning. Engaging multi-functional teams in defining the various elements of a SWOT analysis eliminates the risk of getting too focused on the perspective of a single person (the boss). Enlisting the help of your full team provides a more well-rounded view including the issues faced in the day-to-day operations of the company.

How to Do a SWOT Analysis from Scratch

To get started with the SWOT analysis, there are several approaches. Often, a company will start by performing a SWOT analysis on a competitor as a frame of reference and to get thoughts flowing. It’s usually easier to identify the weaknesses and challenges of your competitors and often they will be congruent to your own company’s challenges.

SWOT analysis is a team effort - everyone should be involved to help target all aspects of the business
via Pxhere

Similarly, as you’re planning how to do a SWOT analysis, consider internal framing of your perspective for strengths and weaknesses and using an outside perspective when thinking of opportunities and threats. Remember that the SWOT analysis paints the picture of where you are today. Using the strategic analysis and plan, you will then decide how to better move toward your goals and company targets. Directly address opportunities and threats within the strategic plan as it is developed. Then plan for the future by strategically pursuing opportunities that fit your goals and troubleshoot relevant threats.

Your Company culture determines the best method to develop the SWOT, whether you use four quadrants on a whiteboard, mind mapping, specific software, or flip charts. The SWOT development method isn’t as important as the content that comes from the activity. However, I recommend no matter what method you take to develop your SWOT, you approach it as a group activity, as the outcome will be more complete and you’ll create a more accurate assessment. Document the SWOT analysis both for reference and for comparison as you move forward with strategic planning.

Using Questions to Develop Your SWOT Analysis

As you’re deciding how to do a SWOT analysis, it’s helpful to develop a set of questions to guide you through each quadrant. You’ll find a set of SWOT template questions below to help as you go through the SWOT analysis exercise.

Notice that in posing the questions, they are often the mirror image of another element of the SWOT analysis. So, don’t be too concerned if a question is in the “wrong” category for your company. A question of Opportunity can be evaluated in the context of a Strength or a Threat, and a Threat may expose a Weakness or convert to an Opportunity. Each quadrant is related and intertwined.

As you might guess, these SWOT template questions aren’t comprehensive. You may wish to amend them to align with issues unique to your own business. As you decide on which questions apply, think in terms of your products, employees, customers, competitors, economy, and more specific questions will come to mind.

SWOT Template: Strengths

The first step in your SWOT analysis is identifying the strengths
via Pxhere

Examine your company’s strengths, both internally and externally. Consider your company against your own benchmarks and the market competition.

    • Does your company’s value proposition compete favorably in the market?
    • What distinguishes your product from that of the competition?
    • Are your systems up-to-date with timely and accurate information for decision-making?
    • Are your distribution channels loyal and functioning well?
    • Does your product reflect an experience for Millennial buyers?
    • Do you have a clear pipeline of new products or services?
    • Are you the market leader in any emerging markets (ex. serving the cannabis market)?
    • Do you provide a highly specialized product?
    • Do you hold patents over other intellectual property?
    • Can you get the job done faster or cheaper than a competitor?
    • Is your customer experience better because frontline employees love their jobs?
    • Can your business grow with your existing infrastructure?
    • Are there high barriers to entry in your business?

 

SWOT Template: Weaknesses

Identifying weaknesses during a SWOT analysis helps you better prepare for improvement
via Pxhere

Don’t be myopic when analyzing weaknesses. Take a clear step back and examine your competitors’ strengths. Look at others within your industry to expose your own challenges.

    • Do you know why your company loses sales?
    • How strong is your brand within the market?
    • How are your lead times compared to the lead times of your competitors?
    • Are your employees provided market pay, benefits, and other perks they value?
    • What complaints do you hear from customers, distributors, or employees? Do you address the concerns and what are they telling you?
    • Do your products represent a substantial enough compensation for your distributors or are you too small a fish in too big a pond?
    • Do you have a high employee turnover?
    • Do you have adequate policies and procedures to assure tribal knowledge stays within the company?
    • Do you have a clear method for facilitating the training and evaluation of employees? Do you have adequate cross-training and bench strength?
    • Do you know your product development and life cycle, especially compared to your competitors?
    • Does your company culture support changes, if they are needed?

 

SWOT Template: Opportunities

As a team, identify the opportunities your business has to grow and improve during the SWOT analysis
via Pxhere

As with strengths and weaknesses, opportunities exposed are considered in the context of the strategic plan (long-term and short-term).

    • Are new markets opening up that your product can address (solar energy, hydroponics, virtual reality, etc.)?
    • Have you created technology that positions your product ahead of the competition?
    • Can you accelerate your development cycle?
    • Can you capitalize on alternate marketing channels (social media, strategic alliances etc.)?
    • Can you tweak your product to meet an alternate demographic need?
    • Have you scoured your intellectual property to find new applications?
    • Can you fill a hole in your product line, distribution channel or geographic reach with an acquisition?
    • How will your customer base change over the next 3 to 5 years? Taylor Swift changed to keep her customer base, will you adapt to the new to keep yours?

 

SWOT Template: Threats

During the SWOT analysis, threats are the last to be identified but they're some of the most important factors
via Pxhere

Don’t forget that unaddressed weaknesses can turn into threats. Think broadly – competitors, general economy, regulations, tariffs, global reach, and product evolution.

    • Is someone eating away at your market share?
    • Are you the high cost/high service producer in a market that is moving toward price competition?
    • Are substitute products entering the market (such as what was seen in the craft brewing industry)?
    • Are you limited to servicing a specific geography (such as in the case of a franchise)?
    • Do you lead or lag in a changing economy and how does that bode for you today?
    • Did you anticipate growth and spend yourself into financial difficulty?
    • Have you addressed eroding market share?
    • Is your industry changing (such as: production moving overseas, alternate products, consolidating for economies of scale, etc.)?
    • Have you evaluated your competition in all of your markets?
    • Are competitors capitalizing on new marketing and distribution channels?
    • Are there regulations or tariffs on the horizon that could negatively affect your business or that of your customer base?
    • Are you dependent on a customer or market facing disruption?
    • Are regulations increasing overhead and threatening profitability (community banks)?
    • Are competitors entering new geographies, consolidating vertical markets or making other changes?

For each section of your SWOT analysis, rank the top five Strengths, Weaknesses, Opportunities, and Threats you’ve identified during your brainstorming session. The criteria for ranking should be the highest value at this point in time (rather than anticipated threats in the future, or past weaknesses now being addressed).

Once you’ve ranked each quadrant of your SWOT analysis, determine how to capitalize on Strengths and Opportunities. How will you move forward productively to make gains? Then address Weaknesses and Threats as you build the strategic plan. Go slow and deliberately address each item. There is no need aim for completion of every item in your plan this year. You may wish to view your plan as 1, 3 and 5-year benchmarks. In the end, the company proceeds with the elements of the SWOT analysis within the context of the vision, mission, and strategic plan.

The SWOT analysis is a great business exercise to highlight areas of importance and keep them on the radar for planning. It’s a simple tool, but one that will really paint the full picture for you and your company. Best of luck on your SWOT analysis! I’m sure it will give you a 360-degree view of where your business is headed.


Featured image via Pxhere. All images licensed for use via Pxhere licensing.

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