SWOT analysis consists of four components: Strengths, Weaknesses, Opportunities & Threats.
Strengths: characteristics of the business or project that give it an advantage over others.
Weaknesses: characteristics of the business that place the business or project at a disadvantage relative to others.
Opportunities: elements in the environment that the business or project could exploit to its advantage.
Threats: elements in the environment that could cause trouble for the business or project.
The first step is to identify the strengths of the process, people and products as it relates to the improvement initiative. Identify both tangible and intangible factors; not situational strengths but rather factors over which you can control. The key here is ‘control’ and means internal factors. It usually means internal to the organization but when improving processes, it can be internal to a business unit, department, geographic location, etc.
Second step is and in a similar fashion, look at the weaknesses of process, people and products. Weaknesses are factors that are within your control that detract from delivering value without significant waste. Ask: why are we doing this project?
Third steps is to switch to the opportunities. What is the targeted improvement? What opportunity are you trying to seize? Why are you doing this now? These questions will help identify the key opportunities. In the traditional SWOT, the opportunities portion of the analysis usually refers to external opportunities. In process improvement initiatives, it can be this or internal opportunities as well.
And last . . . address the threats. Ask: what will happen if this process (or product) is not improved. What will be, or has been, the consequences of not improving the situation. Be specific and as detailed as possible. This also is traditionally external threats but as with the opportunities, it can be this or internal threats to the organization.
SWOT analysis aims to identify the key internal and external factors seen as important to achieving an objective. SWOT analysis groups key pieces of information into two main categories:
- Internal factors — the strengths and weaknesses internal to the organization
- External factors — the opportunities and threats presented by the environment external to the organization
The organization can only act on strengths and weaknesses. The ultimate goal of the SWOT Matrix is to determine exactly how best to utilize your strengths to maximize opportunities and get rid of threats. On the other hand, it serves to determine actions so that your weaknesses do not destroy the opportunities or, worst, become even more destructive threats.
Try to avoid complexity and don’t over analyze things. It’s good to keep your SWOT analysis short and simple. Definitely build different strategies and options based on your SWOT analysis.
Quote to live by:
It is important to know the art of strengthening your strengths
which would enable to weaken your weaknesses
and also lay the foundation for availing the opportunities
and negating the threats that come your way. V Munsif.