By its description in any textbook, the SWOT analysis tool is a very practical and easy framework to apply. The tool calls upon individuals to:
1) Gather information regarding their company and industry
2) Read and assess all the relevant material
3) Create four distinct lists
For a quick review of the basics of a SWOT analysis, download the following presentation:
At the end of the exercise, possible strategies are listed and sent to decision-makers to be considered for possible execution.
Before rushing out and obtaining textbooks and templates to help in executing a SWOT assessment, analysts must realize there are a few elements that might influence how the tool is going to be applied. Without taking the elements under consideration, the end result of the analysis may supply incorrect insights and tactics to implement.
This article will discuss the key elements that are required to execute a proper SWOT analysis session. The majority of university textbooks that are presently being published often ignore the following elements:
When should it be done?
Executing a SWOT analysis can be done on a daily basis; however, strategists will get tired of doing the analysis. Given the frequent and rapid changes in a company and particular industry, the results of the analysis will need to be modified constantly. As a result, analysts will be consumed with performing the SWOT whenever new information becomes available. In order to reap the benefits of the practice of conducting a SWOT analysis, strategists must decide when the analysis should be executed. The exercise could be done on the basis of:
What and how information is gathered
The information that is used in a SWOT analysis exercise must be current and relevant to the firm. Strategists must be concerned with what and how information is gathered on a regular basis. Depending on an internal information gathering functions, strategists ensure that the following is completed:
The information needed to conduct a proper analysis should be verified and updated before being sent to executives. Data that will be used for the analysis must reflect the current status of the industry. If the method of collecting information is flawed, the results of the analysis will be incorrect and hence provide an assessment that can be poor and lack the proper insight to make the right decisions.
How many individuals will be involved?
In theory, a SWOT analysis can be completed by one individual. The analysis entails creating lists of replies to the following questions:
To obtain a balanced perspective for the analysis, a minimum of four individuals should be assigned to the task. The four individuals must take one element of the framework and discover all the possible answers which fit into their category. In terms of selecting the best individuals for the SWOT analysis discovering:
It is important that each individual or groups execute their part of the exercise in separate locations. Having the four individuals or groups divided prevents any bias or influence that one individual or group can have over another.
How should the results be presented?
There are two forms in which the end product of a SWOT analysis can be delivered. In its simplest form, the final product can be a formal shopping list of internal and external factors that may affect the firm in the short and long term. The results can be presented over many pages that will enable decision makers to obtain a quick snapshot of the situation.
A three-by-three matrix is a user-friendly format where analysts can list strengths and weaknesses on the left-hand side of the matrix along with the opportunities and threats posted on the top of the matrix. The format does allow analysts to present their assessment on one page where each element of the SWOT analysis can be matched with other elements so as to arrive at the best strategies to be competitive. As a result, the final document will be a TOWS Matrix matching tool in MS-Word, Powerpoint, and Excel.
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