It has always been important for a business to know and understand how it fits in and interacts with the surrounding environment on both an internal (in the context of our business, this relates to you as an individual, and what you ‘bring to the table’ by way of skills, abilities, personal characteristics) and external view (how your business operates with the outside world).
Examining you and researching your environment will benefit you and/or your team by putting you in a position to develop a strategy for both the long and short term.
The SWOT analysis concept came from the research conducted at Stanford Research Institute from 1960-1970. SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats – and is an extremely useful tool for understanding and helping yourself, your business and your people move forward in their business life.
You shouldn’t be concerned if you are struggling in your strategic planning . . . the background to SWOT stemmed from the need to find out why corporate planning failed. The research was funded by the fortune 500 companies to find out what could be done about this failure. The Research Team were Marion Dosher, Dr Otis Benepe, Albert Humphrey, Robert Stewart, Birger Lie. It all began with the corporate planning trend, which seemed to appear first at Du Pont in 1949.
By 1960 every Fortune 500 company had a ‘corporate planning manager’ (or equivalent) and ‘associations of long range corporate planners’ had sprung up in both the USA and the UK. However a unanimous opinion developed in all of these companies that corporate planning in the shape of long range planning was not working, did not pay off, and was an expensive investment in futility.
Why Use A SWOT Analysis?
Strengths provide an insight to your business opportunities & weaknesses in your business can cause immediate threats. The Strengths can be considered as anything that is favourable towards the business, whereas recognizing the Weaknesses will require you being honest and realistic. Keeping in mind what you have listed as your company Strengths, SWOT Analysis can now influence the Opportunities for the business. These can be seen as targets to achieve and exploit in the future. The final part of the analysis will also be seen as the most feared – the Threats. This part of the analysis has to be done, but it’;s one most people avoid – it’s like putting your head in the sand. If you are willing to take into account what you have listed as your weaknesses, the threats to your success will now all seem too clear.
The SWOT analysis is a useful tool in decision-making for all sorts of situations in business and organizations. Although rarely used in our business (mostly because most entrepreneurs being creative people, do not necessarily have a business background, completing a SWOT analysis is actually very simple. Because it is also very important in making the most of you and your circumstances, I’m providing some information on it here.
What is it?
SWOT analysis is a tool for examining an individual business or ‘business owner’ or an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues to be aware of and key opportunities around them to take advantage of. Business growth depends on ones ability to use this information to best effect.
You can use a SWOT analysis to identify and analyze the Strengths and Weaknesses of your organization, as well as the Opportunities and Threats revealed by the information you have gathered on the external environment.
Who uses it?
The team members, the managers, the coaches – or individuals wanting to create successful results.
Why use it?
To develop a plan that takes into consideration many different internal and external factors, and maximizes the potential of the strengths and opportunities while minimizing the impact of the weaknesses and threats. If you take all of the factors into consideration in your strategic planning, you stack the odds in your favour.
When to use it?
While developing a strategic plan or planning a solution to a problem, after you have analyzed the external environment (for example, the culture, economy, health, sources of funding, demographics, etc.). Taking a regular look at how your business is progressing with regards the SWOT can help you be prepared in advance.
How to use it:
Use the opportunity to help people see the things that may be holding them back (their own weaknesses, and the external obstacles), as they enter a new realm of business, as well as the strengths they bring with them and the opportunities around them.