You may be working somewhere and get told that your organisation, or a particular department, has decided to do a SWOT analysis. What does that mean, and how can you contribute to it?

SWOT is an acronym that stands for Strengths, Weakness, Opportunities and Threats.

Strengths and weaknesses analyse what is working well and what’s not working well within an organisation (INTERNAL factors). So that requires looking at the organisation itself.

Opportunities and threats are EXTERNAL factors which an organisation might be facing, and so require looking outward, at the environment around the organisation, and what new ideas the organisation can come up with.

A SWOT analysis is a useful tool for brainstorming ideas for strategic (long term) planning and you can contribute meaningfully to it by having a considered opinion on these four aspects. It helps if everyone in the team shares honestly what they think, as this creates a depth of understanding of where the organisation is and where it needs to go.

Here’s an example of a situation that a clothing shop (let’s call it MarvelX) finds itself in. The shop was doing well, but recently business has slowed down and the shop is no longer selling as many clothes as they used to 6 months ago. How does the manager make sure that the shop improves on their sales to make good profits, in fact, gets even better than it used to be? The store owner decides to run a SWOT analysis with her staff to get this retail shop back on its feet.

Strengths are areas in a business that are performing well. These are the critical success factors or even the competitive advantage that this shop has over others in the mall. Strengths need to be maintained and built on.
Here are the strengths of MarvelX:
• A great sales staff with excellent product knowledge
• High traffic location in the mall
• Strong relationships with customers
• Successful marketing strategies

Weaknesses are areas in a business that need to minimised as they put the business at a disadvantage to others. Weaknesses need to be dealt with as soon as possible before they become a real problem. Each person doing the SWOT analysis needs to be realistic and honest about the weaknesses in order for the problem to be resolved.
Here are the weaknesses of MarvelX:
• Holding too much stock
• Poor record-keeping of what sells and what does not
• High rental costs
• Administrative staff overloaded with too much work

Opportunities are external factors, such as new clothing trends, that the business needs to seize and take advantage of. If the business is not able to take advantage of new opportunities, it may find that its position in the market becomes even weaker.
Here are some opportunities of our imaginary shop, MarvelX:
• Stock products from new fashion trends
• New trend products to be in shop before Christmas
• Products to be good quality but better priced than others on the market
• Introduce a customer loyalty programme to thank them for shopping at MarvelX

Threats need to be counteracted as soon as possible. These are external threats that could pose a problem for the business.
Here are MarvelX’s threats:
• Competitors have similar products
• Economy slowing down
• New competitor shop opening nearby

Once the SWOT analysis has been completed, the business will be able to clearly see what steps it needs to take to improve its performance.
The manager of MarvelX decides to do the following:
• Maintain MarvelX’s excellent salesforce and good relationship with its customers by ensuring staff feel positive and valued
• Introduce new items from the latest fashion trends.
• Ensure that all the new fashion trend items are in store before the busy Christmas season.
• Reduce stock by creating a clearance shelf and reducing the price on specific slow-selling items.
• Pay for a staff member to do an online course to improve record-keeping skills.
• Maintain the good quality of the new products to be stocked.
• Keep costs down so that loyal customers will chose to shop at MarvelX and not at its competitors.

Getting multiple perspectives for a SWOT analysis is core to it being a success. This is why everyone’s contribution is vital. Although a SWOT analysis may not be able to resolve all issues that an organisation or business is facing, such as a slowing economy, it is a simple and effective tool to outline some of the issues it might have. It’s also an effective way of planning where a business might be going in the future.

Although SWOT analyses are usually done to improve the performance of a business or organisation you can also use this tool to analyse aspects of your life. If you have an area of your life that you would like to improve, for example, your part-time studying, perhaps you could look at what strengths you bring to this (interest in the course), your weaknesses (easily distracted), opportunities (a qualification with better job opportunities) and your threats (failing the course). Doing this can help you clarify your mind, get you focused and on target for where you want to be in the future!


Tell us: Do you think you’d feel confident doing a SWOT analysis with the information?