SWOT Analysis

Used with permission of Mindtools: www.mindtools.com

Understanding Your Strengths, Weaknesses, Opportunities and Threats

Why use the tool?

SWOT Analysis is a very effective way of identifying your Strengths and Weaknesses, and of examining the Opportunities and Threats you face. Carrying out an analysis using the SWOT framework will help you to focus your activities into areas where you are strong, and where the greatest opportunities lie.

Example:

A start-up small consultancy business might carry out the following SWOT analysis:

Strengths:

We are able to respond very quickly as we have no red tape, no need for higher management approval, etc.

We are able to give really good customer care, as the current small amount of work means we have plenty of time to devote to customers.

Our lead consultant has strong reputation within the market
We can change direction quickly if we find that our marketing is not working.

We have small overhead, so can offer good value to customers.

Weaknesses:

Our company has no market presence or reputation.

We have a small staff with a shallow skills base in many areas.

We are vulnerable to vital staff being sick, leaving, etc.

Our cash flow will be unreliable in the early stages.

Opportunities:

Our business sector is expanding, with many future opportunities for success.

Our local council wants to encourage local businesses with work where possible.

Our competitors may be slow to adopt new technologies

Threats:

Will developments in technology change this market beyond our ability to adapt?

A small change in focus of a large competitor might wipe out any market position we achieve.

Conclusions:

The consultancy might therefore decide to specialize in rapid response, good value services to local businesses. Marketing would be in selected local publications, to get the greatest possible market presence for a set advertising budget. The consultancy should keep up-to-date with changes in technology where possible.