Writing a SWOT analysis is a frequent need in many areas of business, from product development to marketing. SWOT is the acronym for Strengths, Weaknesses, Opportunities and Threats. Normally, a SWOT analysis takes the form of a four-part grid, addressing each of the four factors. Basic SWOT analyses are often off-the-cuff exercises, leading to a simple chart, without adequate perspective on how best to react to threats and opportunities, and where strengths and weaknesses originated. A good SWOT analysis can get you thinking about new strategic directions, address fundamental structural issues in your business and move forward toward new initiatives.
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Gather information from various departments on company strengths and weaknesses, if the SWOT analysis is for an entire organisation. If the analysis is for a single department, solicit information from all members of the department--everyone has valuable insights to share. Many quickly-made SWOT analyses are based solely on the creator's interpretation and understanding of a business situation, rather than on multiple perspectives, so incorporating interdisciplinary perspectives will greatly enhance the value of the analysis.
Develop the Strengths and Weaknesses sections first, since they form part of the basis for analysing the potential impact of the opportunities and threats. Focus on the top three to eight strengths and weakness of the organisation or department. Provide details on each strength and weakness. Rather than simply list all the strengths and weaknesses you can think of, without details, as in a basic SWOT analysis, provide insight into how each originated. For a truly effective analysis, suggest ways to enhance strengths and minimise weaknesses.
Gather information on overall industry and economic conditions to gain insight into both Opportunities and Threats. Don't analyse only your industry, but also look at allied industries, and the economy as a whole, to make your SWOT analysis better. Look at factors such outsourcing, the growth of the industry, potential new technologies and all other changes you foresee, even if you are not sure if they are a threat or an opportunity. It is quite possible for some factors in your industry to be both. You will analyse the potential impact of all changes in the light of your strengths and weaknesses.
Identify your top competitors. Analyse those organisations, looking at their product lines, market share and other factors that will help you identify how much of a competitive threat they are.
Determine which changes and developments in your industry are threats, and which are opportunities. Don't hesitate to identify a development as potentially both, highlighting which contingencies could make a new factor a threat, and which contingencies would make it an opportunity--something that will add greater depth the analysis. Identify three to eight threats and opportunities. To enhance the value of the SWOT analysis, offer possible responses to all threats, and ways of taking advantage of all opportunities.
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